The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has taken a pivotal turn as the blockchain company vehemently contests the regulator's request to impose a staggering $2 billion fine. In a recent filing, Ripple urged the court to deny the SEC's "Draconian remedial requests," arguing that the proposed penalty is ungrounded in law or principle.

The cross-border payment protocol has proposed a significantly lower civil penalty of $10 million, asserting that this amount would be "proportionate in both percentage and dollar amount to comparable digital-asset cases where there was no culpable mental state and no substantial harm or risk of harm to others."

At the crux of the dispute lies the SEC's attempt to impose a multi-billion-dollar penalty on Ripple, which includes $876 million in disgorgement, $198 million in pre-judgment interest, and an additional $876 million in civil penalties – a total sum of nearly $2 billion.

Ripple's filing vehemently opposes the SEC's requests, stating, "Ripple has every intent of adhering to that guidance in the future and every incentive to do so. The SEC's Draconian remedial requests are ungrounded in law or principle. This Court should reject them in their entirety."

Stuart Alderoty, Ripple Labs' chief legal officer, has been vocal in his criticism of the SEC's actions, describing the proposed fine as "unreasonable" and suggesting that it reflects the regulator's ongoing "intimidation against all of crypto" in the United States.

Alderoty further emphasized that the case had no allegations or findings of recklessness or fraud, and expressed hope that the judge would approach the final remedies phase of the case in a fair and impartial manner, considering that Ripple had prevailed on "significant" issues.

The dispute between Ripple and the SEC has been ongoing for several years, with the regulator alleging that Ripple's sale of XRP tokens constituted an unregistered securities offering. Ripple has consistently maintained that XRP should not be classified as a security, and the outcome of this legal battle could have far-reaching implications for the cryptocurrency industry as a whole.

As the case progresses, the crypto community will be watching closely to see how the court addresses the parties' divergent positions on the appropriate penalty. The outcome could set a precedent for future enforcement actions and shape the regulatory landscape surrounding digital assets in the United States.