In a recent development that has stirred the cryptocurrency community, Ripple Labs’ Chief Legal Officer, Stuart Alderoty, revealed that the United States Securities and Exchange Commission (SEC) is seeking a staggering $2 billion in fines and penalties against the blockchain firm. This request was disclosed through an X post by Alderoty, mentioning that the SEC had submitted a filing under seal, set to be unveiled on March 26. This action marks a significant escalation in the legal battle that commenced in 2020 when the SEC initiated a civil case against Ripple.
Alderoty criticized the SEC’s aggressive stance, accusing the regulatory body of attempting to punish and intimidate not just Ripple but the broader cryptocurrency industry. “Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large,” he stated, expressing confidence in a fair judicial process during the remedies phase.
Ripple plans to file a comprehensive response to the SEC’s demands in April, challenging what Alderoty describes as misleading and false statements by the regulator. This announcement comes on the heels of a recent judicial rebuke of the SEC, where a Utah judge sanctioned the commission for bad faith in its evidence handling against another firm, Debt Box.
Ripple CEO Brad Garlinghouse echoed Alderoty’s sentiments, expressing astonishment at the unprecedented nature of the $2 billion fine and vowing to continue exposing the SEC’s tactics. The legal controversy stems from the SEC’s December 2020 lawsuit against Ripple, Garlinghouse, and co-founder Chris Larsen, alleging that the company illegally raised $1.3 billion through unregistered security offerings via XRP token sales.
However, in a significant twist, Judge Analisa Torres ruled in July 2023 that XRP could not be considered a security with respect to its programmatic sales on digital asset exchanges. This landmark decision led to the SEC dropping charges against Garlinghouse and Larsen in October 2023. Despite this, the SEC maintains an active legal front against other major crypto entities, including Coinbase, Binance, and Kraken, highlighting the ongoing regulatory challenges faced by the cryptocurrency industry.
