Ripple chief legal officer Stuart Alderoty said the United States Securities and Exchange Commission (SEC) asked a federal judge to impose a whopping $2 billion penalty against the San Fransisco-based fintech firm.
This sets the stage for what could be yet another viciously contested legal battle between the regulator and Ripple.
Ripple Hit With $2 Billion Fines And Penalties
Ripple’s legal head, Stuart Alderoty, has revealed that the Securities and Exchange Commission requested a judge to levy nearly $2 billion in fines and penalties against Ripple. Alderoty said in a March 25 post on X that the agency will seek the fine from a New York judge tomorrow.
“As you will see when the SEC’s brief is made public tomorrow, they ask the Judge for $2B in fines and penalties,” the CLO said.
The SEC’s proposal requests the judge to order Ripple to pay $876 million in disgorgement, $198 million in prejudgment interest, and $876 million in civil penalty, totaling $1.95 billion.
Ripple Execs Blast SEC’s Legal Strategy
Alderoty did not mince words while chastising the SEC, asserting that the top regulator “trades in statements that are false, mischaracterized and designed to mislead”. He added that the agency wants to “punish and intimidate Ripple — and the industry at large.”
Ripple and the SEC have been embroiled in a legal showdown since late 2020. The regulator slapped the blockchain payments startup with a $1.3 billion suit, alleging that it sold unregistered securities to the public in the form of XRP.
But in July 2023, Ripple notched a partial win against the SEC when Judge Analisa Torres ruled that sales of XRP to retail investors via exchanges did not qualify as securities. The ruling may have contributed to the SEC dropping all charges against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen in October 2023 with prejudice.
Alderoty said Ripple intends to file a response to the SEC’s request in April, continuing the saga of its over three-year-long case with the regulator.
Reacting to the 2-billion fine, Garlinghouse echoed the chief legal officer’s sentiments, slamming what he considers as regulatory overreach by the SEC.
“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 Ripple boss added.
He further noted that demanding billions in fines in a case that entailed no allegations of fraud or recklessness is unprecedented:
“There is absolutely no precedent for this. We will continue to expose the SEC for what they are when we respond to this.”
Meanwhile, the price of XRP has remained largely unaffected by the news, rising 2.8% over the last 24 hours. The sixth-largest cryptocurrency was changing hands at $0.63 at publication time, with a 10.2% growth over the past seven days.
