A brief filed by the United States Securities and Exchange Commission (SEC) regarding proposed fines and penalties for blockchain company Ripple presents a different perspective from that of the company’s executives.
In a filing on March 25 in the U.S. District Court for the Southern District of New York, the SEC’s attorneys suggested that Ripple pay $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and a $876,308,712 civil penalty, totaling approximately $1.95 billion. The regulator believes that these fines and penalties are justified due to Ripple’s “defiance of the law” by continuing to sell XRP even after receiving legal warnings.
The SEC stated, “Ripple is in a position to pay a significant civil penalty, and one is necessary in this case because a civil penalty should not simply be the cost of doing business for a violator of securities laws, as determined by the Second Circuit. Additionally, deterrence is essential given Ripple’s substantial amount of unregistered XRP sales over the past three years.”
The filing aligns with what Ripple’s Chief Legal Officer, Stuart Alderoty, stated would be disclosed in a post on March 25, which mentioned fines and penalties of around $2 billion. Alderoty accused the SEC of wanting to “punish and intimidate” Ripple and announced that the company planned to file a response to the proposed judgment in April.
The proposed SEC order also mentioned that in December 2020, the SEC filed a lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen, alleging that the company raised $1.3 billion in unregistered securities through the sale of XRP tokens. The case garnered attention in the cryptocurrency industry when Judge Analisa Torres ruled in July 2023 that XRP was not considered a security in the context of programmatic sales on digital asset exchanges.