Ripple Labs, a blockchain firm, is facing a $2 billion penalty requested by the United States Securities and Exchange Commission (SEC), according to Stuart Alderoty, the company’s chief legal officer. The SEC’s request was made in a filing that was under seal until March 26. The civil case between Ripple and the SEC has been ongoing since the regulator filed it in 2020. Alderoty expressed his disappointment with the SEC, accusing them of wanting to punish and intimidate Ripple and the industry as a whole. He hopes that the court will handle the remedies phase fairly. Ripple plans to respond to the SEC in April and has criticized the regulator for making false and misleading statements.
In a separate case, a Utah judge sanctioned the SEC for acting in bad faith in relation to the evidence it provided against the company Debt Box. Ripple CEO Brad Garlinghouse criticized the $2 billion fine, stating that there is no precedent for such a penalty. He vowed to expose the SEC for their actions when responding to their request.
The SEC initially filed a lawsuit against Ripple, Garlinghouse, and co-founder Chris Larsen in December 2020. The lawsuit alleged that Ripple had raised $1.3 billion through the sale of unregistered securities in the form of XRP tokens. In July 2023, Judge Analisa Torres ruled that XRP was not a security when it was sold on digital asset exchanges. This ruling may have led to the dismissal of charges against Garlinghouse and Larsen in October 2023.
It is important to note that the SEC has ongoing civil lawsuits against other cryptocurrency firms in the United States, including Coinbase, Binance, and Kraken. These cases highlight the regulatory scrutiny faced by the crypto industry as it continues to grow and evolve.
