In a significant development in the ongoing legal dispute between Ripple and the Securities and Exchange Commission (SEC), the crypto company has filed a Notice of Supplemental Authority, drawing parallels between its case and the SEC's recent settlement with TerraForm Labs. Ripple aims to challenge the regulator's requested $2 billion penalty for institutional XRP sales, arguing that it is disproportionately high compared to penalties in similar cases.

The SEC's case against TerraForm Labs resulted in a $4.47 billion fine for orchestrating one of the largest securities frauds in US history. Ripple's legal team notes that the SEC's civil penalty against TerraForm Labs represented approximately 1.27% of the firm's $33 billion in gross sales, whereas the requested penalty in the XRP case is significantly higher, despite no allegations of fraud or substantial losses suffered by institutional buyers.

Ripple asserts that the regulator's request is unprecedented and unreasonable, suggesting that an appropriate civil penalty would be no more than $10 million. By highlighting the TerraForm Labs judgment, Ripple seeks to demonstrate the inconsistency in the approach to penalties and aims for a more fair resolution.

This development adds a new layer to the ongoing legal battle between Ripple and the SEC, with the crypto company determined to challenge what it sees as an excessive penalty. As the case continues to unfold, it remains to be seen how the regulator will respond to Ripple's arguments and whether the precedent set by the TerraForm Labs case will have a significant impact on the outcome.

The XRP community is closely watching the developments in the case, with many supporters expressing their backing for Ripple's stance. The outcome of this legal battle could have significant implications for the cryptocurrency industry as a whole, and it remains to be seen how the regulator will approach similar cases in the future.

In conclusion, Ripple's decision to challenge the SEC's penalty demands by citing the TerraForm Labs precedent adds a new twist to the ongoing legal battle. As the case continues to unfold, it is clear that the crypto company is determined to fight for what it believes is a fair resolution. The outcome of this case could have significant implications for the cryptocurrency industry, and it remains to be seen how the regulator will respond to Ripple's arguments.