Ripple is likely to manage to significantly reduce the potential $770 million fine imposed by the SEC, according to legal expert Jeremy Hogan.
In a recent thread on a social media platform, Hogan outlined key arguments that Ripple could use to reduce the financial penalties sought by the SEC. These arguments are based on recent legal precedents and the specific circumstances surrounding Ripple’s sales of its digital asset, XRP.
Hogan’s first argument centers on the “disgorgement” sought by the SEC, which aims to recover profits allegedly obtained through wrongful actions.
Hogan suggests that Ripple should base this disgorgement on the company’s net profits rather than the gross amount. This distinction is crucial because it would allow Ripple to subtract legitimate business expenses, potentially leading to a significant reduction in the overall fine.
Another important point raised by Hogan relates to the jurisdiction of the SEC. He notes that only XRP sales with a clear connection to the United States should fall under the SEC’s purview. This could further limit the scope of any financial penalty imposed on Ripple.
Furthermore, a recent court decision has boosted Ripple’s confidence. Stuart Alderoty, Ripple’s chief lawyer, has welcomed the 2nd Circuit’s ruling in SEC v. Govil, which asserts that the SEC must demonstrate that investors have actually suffered financial losses before seeking substantial disgorgement.
Hogan supports this perspective, indicating that Ripple’s liability may hinge on whether XRP investors have indeed incurred losses.