A recent filing in the US District Court for the Southern District of New York shows that Ripple’s legal team has submitted a notice of supplemental authority, arguing against the SEC's requested civil penalty as "unreasonable."

The filing, made on June 13, coincided with Terraform Labs settling a lawsuit with the SEC for $4.47 billion. Ripple’s lawyers urged the court to consider an "appropriate" civil penalty, citing the Terraform Labs settlement as a precedent. Ripple’s defense attorney James Filan shared a PDF copy of the filing on X.

The SEC had asked Ripple to pay roughly $2 billion in disgorgement, prejudgment interest, and civil penalties. In response, Ripple argued for a penalty cap of no more than $10 million, citing similar cases against Block.one, Telegram, and Genesis Global Capital. Ripple’s filing redacted critical information that could provide context based on the firm’s revenue numbers.

“As Ripple’s opposition explained, in comparable (and even in more egregious) cases, the SEC has agreed to civil penalties ranging from 0.6% to 1.8% of the defendant’s gross revenues,” stated Ripple’s lawyers in the filing.

Ripple's legal team also argued that the Terraform case supports their position, asserting that the SEC is seeking an excessive penalty compared to the Terraform settlement, which did not involve allegations of fraud.

“Terraform thus confirms that the Court should reject the SEC’s disproportionate and unprecedented request and that an appropriate civil penalty would be no more than $10 million,” the lawyers said.

The SEC’s case against Ripple began in December 2020, accusing the blockchain firm of using its XRP token as an unregistered security to raise funds. This case has become one of the crypto industry’s longest-running legal battles, setting a significant legal precedent in July 2023 when Judge Analisa Torres ruled that the XRP token was not a security regarding programmatic sales on exchanges.

In October 2023, the SEC moved to dismiss its case against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen, indicating plans to discuss remedies with the blockchain firm. Judge Torres later rejected the SEC’s motion.

Although Judge Torres initially scheduled the trial between Ripple and the SEC to begin in April, she adjourned the proceedings in October 2023 with no new date set. As of the time of publication, it remains unclear when the judge could schedule the trial to resume.