The United States Securities and Exchange Commission (SEC) has proposed a $2 billion fine against Ripple Labs, as stated by Stuart Alderoty, the company’s Chief Legal Officer. This request forms part of a legal document that is expected to be unveiled to the public soon. The development is the latest in a series of legal actions initiated by the SEC against Ripple since December 2020, centered around the allegation of raising $1.3 billion through the sale of unregistered securities via XRP tokens.
Ripple’s legal battle with the SEC has been ongoing, with significant moments including a July 2023 court ruling where Judge Analisa Torres found that XRP did not constitute a security in relation to programmatic sales on digital asset exchanges. This decision was seen as a partial victory for Ripple, though the case continues to unfold.
Alderoty criticized the SEC’s request for penalties, accusing the regulator of aiming to punish and intimidate Ripple and the wider industry. Brad Garlinghouse, Ripple’s CEO, has also spoken out against the SEC’s actions, promising a robust response to the allegations. The legal skirmishes come against a backdrop of the SEC taking action against other major entities in the cryptocurrency sector, including Coinbase, Binance, and Kraken.
The SEC’s lawsuit against Ripple, alongside Garlinghouse and co-founder Chris Larsen, alleges unauthorized securities sales through XRP. However, the regulator moved to dismiss charges against Garlinghouse and Larsen in October 2023, following the court’s ruling on XRP’s status.
As Ripple prepares its formal response to the SEC’s recent penalty request, the case highlights the ongoing regulatory scrutiny faced by the cryptocurrency industry. The SEC’s aggressive stance towards Ripple and other firms underlines the complex regulatory environment surrounding digital assets and blockchain technology.