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. In a post on March 25, Alderoty stated that the SEC made this request as part of a filing that will remain under seal until March 26. The SEC’s civil case against Ripple has been ongoing since it was filed in 2020.
Alderoty expressed his concerns about the SEC’s approach, stating, “Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large. We trust the Court will approach the remedies phase fairly.”
The chief legal officer also mentioned that Ripple plans to file a response to the SEC’s request in April. However, he criticized the regulator, claiming that it “trades in statements that are false, mischaracterized, and designed to mislead.” Alderoty’s comments come after a Utah judge imposed sanctions on the SEC on March 18, accusing the regulator of acting in “bad faith” regarding the evidence it presented against the firm Debt Box.
Ripple CEO Brad Garlinghouse also weighed in on the matter, expressing his disbelief at the $2 billion fine. He stated, “There is absolutely no precedent for this. We will continue to expose the SEC for what they are when we respond to this.”
The SEC’s lawsuit against Ripple, Garlinghouse, and co-founder Chris Larsen was filed in December 2020. The regulator alleged that the firm raised $1.3 billion in unregistered securities through the sale of XRP tokens. However, in July 2023, Judge Analisa Torres ruled that XRP was not a security in relation to programmatic sales on digital asset exchanges.
This ruling may have influenced the SEC’s decision to dismiss charges against Garlinghouse and Larsen in October 2023 with prejudice. The SEC currently has ongoing civil lawsuits against various cryptocurrency firms in the United States, including Coinbase, Binance, and Kraken.
It seems that US enforcement agencies are increasing their efforts to combat crypto-related crime, as highlighted in this article.