According to the firm’s chief legal officer, the United States Securities and Exchange Commission is seeking $2 billion in fines and penalties in its case against Ripple Labs.
The fines and penalties asked for the penalties and fines in court papers filed under seal.
SEC Seeks Significant Penalties
Details regarding the Securities and Exchange Commission’s demands were shared by Ripple’s Chief Legal Officer, Stuart Alderoty, who stated that instead of applying the law, the SEC continues to remain bent on punishing and intimidating Ripple and the larger crypto industry, adding that Ripple will file their response to the Security and Exchange Commission’s proposal next month.
“Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple - and the industry at large. “Our response will be filed next month, but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized, and designed to mislead. They stayed true to form here.”
The SEC is scheduled to file the documents publicly with redactions on Tuesday.
An Unprecedented Demand
Ripple CEO Brad Garlinghouse called the $2 billion sought by the Securities and Exchange Commission unprecedented as the case involved no allegations or findings of fraud and recklessness. He also accused the SEC of acting outside the law, giving the example of Debt Box. The commission was sanctioned by the judge overseeing the case, who accused the agency of acting in bad faith and abuse of power.
“We will continue to expose the SEC for what they are when we respond to this. Gensler’s SEC has repeatedly acted outside the law – not going unnoticed by Judges admonishing the agency for a “gross abuse of the power entrusted to it by Congress” (DEBT Box case) and for acting without “faithful allegiance to the law” (Ripple case). Let’s not also forget Gensler’s lack of attention to SBFraud.”
The SEC has not commented on the matter so far. District Judge Analisa Torres had ruled in July that Ripple’s sale of XRP worth $728.9 million to hedge funds and other sophisticated buyers amounted to the unlawful sales of unregistered securities.
SEC vs Ripple
The Securities and Exchange Commission had sued Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in 2020, accusing them of illegally raising over $1.3 billion via an unregistered securities offering through the sale of XRP. However, the commission dropped its remaining claims against Larsen and Garlinghouse in October. The case attracted considerable attention as it was the biggest one brought by the SEC against an entity in the crypto space.
However, the SEC managed to secure only a partial victory in the case, with Judge Torres ruling that XRP sold on public cryptocurrency exchanges did not meet the legal definition of a security in a major setback. While Torres has denied the SEC’s request to repeal the ruling while the case is in progress, the commission may appeal again once the judge decides its requests for penalties.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
