A brief filed by the United States Securities and Exchange Commission (SEC) has presented a different perspective on the actions of blockchain firm Ripple compared to the narrative put forth by the company’s executives. The filing, made on March 25 in the U.S. District Court for the Southern District of New York, proposed that Ripple pay approximately $1.95 billion in fines and penalties. This includes $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and a $876,308,712 civil penalty. The SEC argues that these punishments are appropriate due to Ripple’s disregard for the law and its continued sale of XRP tokens despite legal warnings. The SEC stated, “Ripple is well-positioned to pay a significant civil penalty,” and emphasized the need for deterrence given the large volume of unregistered XRP sales over the past three years. Ripple’s Chief Legal Officer, Stuart Alderoty, had previously indicated that the fines and penalties would amount to around $2 billion, accusing the SEC of attempting to punish and intimidate the company. Ripple plans to respond to the proposed judgment in April. The SEC’s lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen, filed in December 2020, alleged that the company raised $1.3 billion in unregistered securities through the sale of XRP tokens. The case gained attention in the cryptocurrency industry when Judge Analisa Torres ruled in July 2023 that XRP was not a security in relation to programmatic sales on digital asset exchanges.
SEC declares Ripple to be in a favorable position for paying a substantial civil penalty.