Ripple Labs’ chief legal officer, Stuart Alderoty, has revealed that the United States Securities and Exchange Commission (SEC) has requested a $2 billion penalty against the blockchain firm. Alderoty made this announcement in a post on March 25, stating that the SEC filed the request under seal until March 26. The civil case against Ripple has been ongoing since the SEC initiated it in 2020.
Expressing his dissatisfaction with the SEC’s actions, Alderoty said, “Instead of applying the law faithfully, the SEC is determined to punish and intimidate not just Ripple, but the entire industry. We have confidence that the court will handle the remedies phase fairly.”
In response to the SEC’s request, Ripple plans to file a response in April. However, Alderoty criticized the regulator, accusing it of making false and misleading statements. The SEC has faced sanctions for acting in “bad faith” regarding the evidence it presented against the firm Debt Box, as ruled by a Utah judge on March 18.
Ripple CEO Brad Garlinghouse also voiced his disapproval of the $2 billion fine, stating, “This is unprecedented. When we respond, we will continue to expose the SEC for who they really are.”
The SEC filed a lawsuit against Ripple, Garlinghouse, and co-founder Chris Larsen in December 2020, alleging that the firm 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 should not be classified as a security for programmatic sales on digital asset exchanges.
This ruling may have led to the SEC dismissing charges against Garlinghouse and Larsen in October 2023 with prejudice. The SEC currently has ongoing civil lawsuits against several cryptocurrency firms in the United States, including Coinbase, Binance, and Kraken.
In summary, US enforcement agencies are intensifying their efforts to combat cryptocurrency-related crimes.