Reducing Ripple's Fine: A Legal Expert's Proposal

Proposal to Reduce Ripple's Fine

Legal expert Jeremy Hogan has proposed a strategy to potentially reduce Ripple's anticipated $770 million fine by the U.S. Securities and Exchange Commission (SEC). Hogan suggests calculating Ripple's penalty based on net profits, factoring in business expense deductions. This approach could significantly lower the fine.

Limiting SEC's Scope

Hogan emphasizes that only U.S.-related transactions should be subject to SEC scrutiny. This limitation could reduce the financial penalty's scope. The proposal aligns with a recent court ruling in SEC v. Govil, which requires the SEC to demonstrate actual financial harm to investors before demanding significant disgorgement.

Ripple's Legal Stance

Ripple's chief counsel, Stuart Alderoty, supports Hogan's view, suggesting that the SEC's disgorgement should derive from net profits rather than gross sales. This perspective is crucial, as it ties Ripple's liability to whether XRP investors incurred losses.

Dismissal of Charges

The SEC recently dismissed charges against Ripple executives Brad Garlinghouse and Chris Larsen. Alderoty described this as a "surrender," indicating a potential shift in Ripple's legal battle with the SEC.

Impact of Recent Case Law

Hogan's arguments leverage recent case law and the unique circumstances of XRP sales. These factors may influence Ripple's financial liability in the ongoing dispute with the SEC. The proposal and related legal developments highlight strategic considerations in high-stakes regulatory challenges.