The U.S. Securities and Exchange Commission (SEC) is reportedly seeking a $2 billion penalty against blockchain firm Ripple Labs, according to statements from Ripple’s Chief Legal Officer Stuart Alderoty.
The request to impose fines and penalties is part of a legal filing that remains under seal, with public disclosure expected imminently. This development escalates the ongoing legal dispute initiated by the SEC in December 2020, alleging Ripple raised $1.3 billion through sales of XRP tokens, considered by the regulator as unregistered securities.
Ripple’s executives have publicly responded to the SEC’s latest action, challenging the regulator’s approach and intentions. Alderoty criticized the SEC for attempting to punish and intimidate Ripple, suggesting the regulator’s statements are misleading.
Similarly, Ripple CEO Brad Garlinghouse expressed disbelief over the unprecedented size of the fine and committed to exposing the SEC’s actions in their forthcoming response planned for April.
The case has been notable for its complexities, including a July 2023 ruling by Judge Analisa Torres that identified XRP not as a security in relation to programmatic sales on digital asset exchanges. This partial victory for Ripple shifted the momentum in the case, leading to the SEC moving to dismiss charges against individual executives Garlinghouse and co-founder Chris Larsen with prejudice in October 2023.
Last month, Ripple’s CEO, Brad Garlinghouse, criticized the SEC for being “extremely antagonistic,” labeling SEC Chairman Gary Gensler as a “political burden” and critiquing his regulatory approach to the cryptocurrency sector as ineffective. Ripple represents just one of numerous firms that have come under the SEC’s scrutiny lately. The regulatory body has taken legal action against several prominent U.S. cryptocurrency exchanges and financial institutions, accusing them of consistently selling digital tokens that were not registered as securities.
