Stuart Alderoty, the chief legal officer of Ripple Labs, revealed that the United States Securities and Exchange Commission (SEC) has requested a federal judge to impose a $2 billion penalty on the blockchain firm. This development comes as part of an ongoing civil case initiated by the SEC against Ripple in 2020.
Ripple Slams SEC’s $2 Billion Fine Proposal
Alderoty disclosed in a March 25 post that the SEC’s request for the hefty penalty was made under seal until March 26. He criticized the SEC’s approach, stating that instead of applying the law faithfully, the regulator appears intent on punishing and intimidating Ripple and the wider industry. Alderoty expressed confidence in the court’s impartial handling of the remedies phase.
The SEC’s move elicited strong reactions from Ripple’s leadership. Ripple CEO Brad Garlinghouse condemned the proposed $2 billion fine, labeling it unprecedented. He asserted that Ripple would continue to challenge the SEC’s actions and expose what he perceives as the regulator’s true nature.
The tension between Ripple and the SEC has escalated further following a Utah judge’s decision on March 18 to impose sanctions on the SEC for acting in “bad faith” in another case involving the firm Debt Box. Garlinghouse highlighted this as indicative of the SEC’s conduct.
The lawsuit filed by the SEC in December 2020 alleges that Ripple, Garlinghouse, and co-founder Chris Larsen violated securities laws by raising $1.3 billion through unregistered securities sales of XRP tokens. However, a significant ruling in July 2023 by Judge Analisa Torres determined that XRP was not security concerning its sales on digital asset exchanges, potentially influencing the SEC’s subsequent dismissal of charges against Garlinghouse and Larsen with prejudice in October 2023. The SEC’s pursuit of legal action against various crypto firms, including Coinbase, Binance, and Kraken, underscores its ongoing efforts to regulate the crypto industry.
