In a bold move, Ripple Labs has countered the U.S. Securities and Exchange Commission's (SEC) staggering $2 billion penalty demand with a proposed cap of $10 million, significantly reducing the initial amount. Andrew J. Ceresney, Ripple's legal representative from Debevoise & Plimpton LLP, outlined two crucial points in a letter to Judge Analisa Torres, seeking to shift the court's perspective on the matter.

At the heart of Ripple's defense are two core arguments. Firstly, the company asserts that its XRP token does not constitute a security under federal law, and therefore, the SEC's jurisdiction is limited. Secondly, Ripple argues that even if XRP were considered a security, the SEC's penalty demand is excessive and unreasonable.

Ceresney's letter emphasizes that the SEC's proposed penalty is disproportionate to the alleged offense, highlighting the need for a more reasonable and fair approach. By proposing a significantly lower fine of $10 million, Ripple Labs aims to demonstrate its commitment to resolving the matter while also standing firm on its belief that the SEC's claims are unfounded.

This development marks a significant turning point in the ongoing legal battle between Ripple Labs and the SEC. As the case continues to unfold, it is clear that both parties are dug in, each convinced that their position is justified. The outcome of this case will have far-reaching implications for the cryptocurrency industry, and all eyes are on Judge Analisa Torres to deliver a verdict that will set a precedent for future cases.