The U.S. Securities and Exchange Commission (SEC) is gunning for nearly $2 billion in fines from Ripple Labs over its dealings with XRP (XRP-USD). This action has elicited strong responses from the cryptocurrency community and from Ripple’s CEO, who asserts, “There is absolutely no precedent for this,” as the company braces to counter the SEC’s claims.
The crux of this legal battle came into the spotlight on Tuesday when court documents revealed the SEC’s request for District Judge Analisa Torres to impose a staggering $1.95 billion in fines against Ripple Labs.
The hefty sum is divided into three parts:
- $876,308,712 for disgorgement (illegal profits)
- $876,308,712 as a civil penalty
- $198,150,940 in prejudgment interest
Interestingly, SEC Chairman Gensler asked Congress for an additional $2.6 billion for their enforcement efforts.
Ripple’s Counter-Offensive
Ripple’s chief legal officer, Stuart Alderoty, took to social media to announce the company’s plan to file a response next month. Alderoty criticized the SEC’s approach, accusing the regulator of misleading and intimidation tactics. “Rather than faithfully applying the law, the SEC remains bent on wanting to punish and intimidate Ripple — and the industry at large,” Alderoty stated, expressing confidence in the court’s fairness during the remedies phase.
Ripple CEO Brad Garlinghouse has been vocal about his dismay towards the SEC’s actions, accusing Chair Gary Gensler’s SEC of acting beyond its legal boundaries. He cites instances where judges have reprimanded the SEC for overstepping its authority, highlighting the agency’s alleged neglect in the case of former FTX CEO Sam Bankman-Fried. Garlinghouse emphasizes the lack of fraud or recklessness allegations in the SEC’s case against Ripple, framing the $2 billion fine as baseless and unprecedented.
Industry analysts, pundits, and investors have taken to social media, accusing the SEC’s tyrannical fine as a response to being embarrassed after losing its goal of having the courts classify XRP as a security and suffering a series of losses against the crypto industry.
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