The U.S. Securities and Exchange Commission (SEC) has rebutted Ripple's attempt to lower fines in their ongoing legal dispute. The SEC stated that the circumstances were different from those of Terraform Labs, which was recently fined.

Ripple has been engaged in a legal battle with the SEC since 2020, contesting a proposed $2 billion fine for selling XRP to institutional investors. Ripple compared its situation to that of Terraform Labs in a "notice of supplemental authority" filed on June 13. The following day, the SEC countered, asserting that Ripple and Terraform Labs are under different circumstances.

"In asking the Court to tether its penalty determination in this case to the settlement in Terraform, Ripple fails to note that the corporate defendant there is in bankruptcy, going 'out of business for good,' burning the keys to all of its crypto asset securities, agreeing to return a significant amount to investors in those securities, and removing two of the board members in charge at the time of the violations," the SEC's lawyers stated. "Ripple is agreeing to none of this relief—in fact, Ripple is agreeing to nothing," they added.

Terraform Labs agreed to pay $4.47 billion as part of a settlement with the SEC. This settlement included measures to prevent Terraform co-founder Do Kwon from holding any officer or director positions in public companies and blocked involvement in transactions involving "crypto asset securities."

In its plea for reduced fines, Ripple referenced a jury's April determination that Terraform's Kwon engaged in civil fraud, noting that its own case with the SEC did not include fraud allegations. Ripple argued that its civil penalty should not exceed $10 million and compared the size of the Terraform penalty to the defendant’s “gross sales,” suggesting the Court should impose a similar 1.27% ratio.

However, the SEC contended that comparing the fines between the two firms was not valid. They argued that Ripple's approach avoided comparing the Terraform settlement’s penalty to the gross profit of the violative conduct, which yields a much higher ratio. The SEC pointed out that applying the 11.7% ratio to Ripple's $876.3 million in gross profits would result in a $102.6 million penalty, far exceeding Ripple's proposed $10 million ceiling.

Ripple Chief Legal Officer Stuart Alderoty responded to the SEC's stance on X over the weekend, emphasizing that the court had clarified that XRP is not a security and arguing that there are no victims to compensate. He also noted that Ripple continues to thrive despite the SEC's demands.

The SEC has accused Ripple of raising $1.3 billion through the sale of XRP, which it considers an unregistered security. Judge Analisa Torres previously ruled that while some of Ripple’s sales of XRP did not violate securities laws due to a blind bid process, other direct sales to institutional investors were classified as securities.