SEC Reportedly to Seek $2 Billion in Fines from Ripple, Says CEO

The U.S. Securities and Exchange Commission (SEC) will reportedly seek $2 billion in fines and penalties from Ripple Labs, according to Stuart Alderoty, the company’s chief legal officer.

In a tweet on X, Alderoty stated that Ripple will respond to the SEC’s proposal next month. Alderoty also accused the regulator of making false and misleading statements aimed at intimidating the company and the cryptocurrency industry.

Key points:

• The SEC to seek $2 billion in fines and penalties from Ripple Labs.
• Ripple CEO Brad Garlinghouse claims the amount is unprecedented, as the case involved no allegations or findings of fraud or recklessness.
• Ripple executives accuse the SEC of acting outside the law and abusing its power.
• Judge Robert Shelby, overseeing the DEBT Box case, sanctioned the SEC for “bad faith conduct” and abusing its power.
• In July 2023, Judge Analisa Torres issued a summary judgment, determining that programmatic sales of XRP did not qualify as unregistered securities transactions.

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Brad Garlinghouse, Ripple’s CEO, also took to X to express his frustration with the SEC’s actions. He emphasized that the SEC’s planned $2 billion fine is unprecedented. This is because there were no allegations or findings of fraud or recklessness in the case against Ripple.

Ripple CEO cited the recent DEBT Box case

Garlinghouse accused the SEC of acting outside the law and cited the recent DEBT Box case. In the case, Judge Robert Shelby sanctioned the agency for “bad faith conduct” and abusing its power.

The SEC’s legal battle with Ripple has been ongoing for several years. In July 2023, Judge Analisa Torres issued a summary judgment that dealt a blow to the SEC’s argument.

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While programmatic sales of Ripple’s XRP token did not qualify as unregistered securities transactions, the judgment determined that institutional sales could. This ruling contradicted the SEC’s claim that Ripple had knowingly violated securities laws.

Following the summary judgment, the SEC announced that it would not pursue a trial against Garlinghouse and Ripple co-founder Chris Larsen. However, the regulator’s recent move to seek $2 billion in fines and penalties has reignited the conflict between the two parties.