SEC Seeks $1.95 Billion Fine Against Ripple Labs
The US Securities and Exchange Commission (SEC) has requested a New York judge to impose a $1.95 billion fine against Ripple Labs. This demand is part of an ongoing legal dispute between the crypto company and the US regulatory body since December 2020.
Ripple Labs’ Chief Legal Officer, Stuart Alderoty, strongly reacted to this request, promising a formal response from the company next month.
In detail, the SEC proposes that Ripple Labs be ordered to pay $876 million in restitution, $198 million in prejudgment interest, and a civil penalty of $876 million. This total sum, amounting to nearly $2 billion, represents one of the most substantial fines ever sought in the crypto asset space.
Context of the Dispute and SEC’s Ambitions
The dispute started with a SEC complaint in December 2020, accusing Ripple Labs and its executives of violating federal securities laws by selling XRP to institutional and retail customers.
Last July, New York Judge Analisa Torres ruled that the sale of XRP on exchanges and through algorithms did not violate US law, unlike Ripple’s institutional sales of XRP.
The SEC justifies its request by highlighting how easily actors, especially in the crypto asset field, can engage in conduct similar to Ripple’s.
“We will continue to criticize the SEC for what it is when we respond to this case.”
Stuart Alderoty, Chief Legal Officer of Ripple Labs
The regulatory body aims to send a clear message, asserting that such practices will not be tolerated. Stuart Alderoty criticized this approach, arguing that the SEC exceeds its authority. The official response from Ripple Labs to the SEC’s motion is expected next month, with a deadline set no later than April 22, 2024.
