8 months ago
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The US Securities and Exchange Commission (SEC) has asked a New York judge to impose a fine of $1.95 billion on Ripple Labs, according to court filings.
The proposed fine consists of $876 million in disgorgement, $198 million in prejudgment interest, and an additional $876 million civil penalty.
Stuart Alderoty, Ripple Labs’ chief legal officer, revealed the SEC’s request on social media on Monday, stating that redacted versions of the court documents would be made public by March 26. Ripple Labs is expected to file its response to the SEC’s motion by April 22 this year.
“The SEC asks the Court to consider how easily actors, particularly in the crypto asset space, can today engage in the same sort of conduct as Ripple’s and send a strong message that such abuses will not be tolerated,” the SEC filing stated.
The Commission’s case against Ripple Labs and its executives began in December 2020, alleging that they violated federal securities laws by selling XRP to both institutional and retail customers. In July 2023, New York Judge Analisa Torres ruled that only Ripple’s institutional sales of XRP violated US laws, while the sale of XRP on exchanges and through algorithms did not.
The SEC’s filing emphasizes the need to deter similar conduct in the crypto asset space, particularly in light of the ease with which actors can engage in such practices. The proposed fine is intended to send a strong message that such abuses will not be tolerated by the regulatory authority.
Alderoty criticized the SEC’s actions and stated that Ripple Labs would file its response to the SEC’s motion next month. The case has significant implications for the cryptocurrency industry, as it could set a precedent for how digital assets are classified and regulated in the United States.
The outcome of the lawsuit and the court’s decision on the proposed fine will be closely watched by the crypto community and could have far-reaching consequences for the future of digital asset regulation.
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