Ripple, which has been embroiled in a legal dispute with the SEC since 2020, drew parallels between the regulator's suggested $2 billion fine for selling XRP to institutional investors and the settlement reached between Terraform Labs and the SEC.

The SEC, however, has contended that the circumstances surrounding the two cases are distinct. In a filing submitted to a New York district court, the SEC pointed out that Terraform Labs, unlike Ripple, is facing bankruptcy, relinquishing its crypto asset securities, and agreeing to compensate investors. Furthermore, Terraform Labs has agreed to pay $4.47 billion as part of its settlement with the SEC, which was authorized by a judge last week.

In its endeavor to secure lower fines, Ripple has cited a jury's verdict in April, which found Terraform Labs' co-founder, Do Kwon, guilty of civil fraud. Ripple has argued that its own case with the SEC lacks allegations of fraud and, consequently, its civil penalty should not exceed $10 million. Ripple has also drawn comparisons between the magnitude of the Terraform penalty and the defendant's "gross sales," advocating for the court to apply the same 1.27% ratio in its own case.

The SEC, however, has dismissed this comparison, stating that the fine amounts between the two firms are not equivalent. The SEC has pointed out that Ripple's argument focuses on comparing the size of Terraform's penalty to "gross sales," which would result in a 1.27% ratio in Ripple's case. The SEC has emphasized that Ripple avoids comparing the Terraform settlement's penalty to the gross profit from the violative conduct, which would yield a significantly higher ratio of 11.7%.

Ripple's Chief Legal Officer, Stuart Alderoty, has responded to the SEC's stance, asserting that the court has provided clarity that XRP is not a security and that there are no victims to compensate. Alderoty has also highlighted that Ripple is thriving, despite the SEC's claims. The SEC, however, has maintained its position, stating that Ripple is not willing to accept any terms and that the firm's efforts to lower its fines are unjustified.