SEC Investigates: Does Ripple Deserve Harsher Punishment Than Terraform Labs?


• The United States Securities and Exchange Commission (SEC) is facing scrutiny over its recent lawsuit against Terraform Labs and Do Kwon.
• The SEC is treating the defendants with less severity than Ripple, raising questions about their inconsistent approach to regulating the cryptocurrency industry.
• This case has far-reaching implications for the future of cryptocurrencies in the US and is a legal test of the SEC’s system of „regulation by enforcement“.

SEC vs Ripple

The SEC is pursuing legal action against Ripple and anyone associated with it, such as employees, agents, and lawyers. However, Ripple has fiercely defended its position that XRP is not a security. Recently, the SEC admitted that XRP is a software code and not a security but argued that it should be held to the same standards as Ethereum.

SEC vs Terraform Labs & Kwon

In contrast to Ripple’s case, the SEC’s lawsuit against Terraform Labs and Kwon alleges that they conducted a multi-billion dollar crypto asset securities fraud. They are accused of selling an „inter-connected suite of crypto asset securities“ through unregistered transactions while also misleading investors about the stability of their stablecoin – Anchor Protocol – which promised 20% interest on USTC deposits without disclosing any risks involved.

Implication For Cryptocurrency Industry

The outcome of this case could have major implications for cryptocurrency regulation in the US in years to come as regulators continue to play an increasingly significant role in shaping this industry.


The ongoing dispute between SEC and both Ripple and Terraform Labs & Kwon highlights how important it is for all parties involved in cryptocurrency investments to understand all applicable regulations before making any decisions regarding investments within this space. It will be interesting to see how these cases progress over time as regulatory bodies continue to take an active role in overseeing this fast-evolving market segment.