Ripple Slapped with Proposed $2 Billion SEC Fine, Company Vows to “Expose” Regulator

Key Takeaways

• The SEC is seeking a massive fine from Ripple Labs, including disgorgement, prejudgment interest, and a civil penalty.
• Brad Garlinghouse criticizes the SEC’s fine as excessive and unprecedented.
• Ripple plans to fight the SEC’s accusations and may use a previous ruling criticizing SEC’s tactics to support their case.

Ripple CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty have disclosed  that the SEC is pursuing fines and penalties amounting to a colossal $2 billion.

According to recent court documents, the United States Securities and Exchange Commission (SEC) has asked  a New York judge to levy the fine against Ripple Labs.

SEC Seeks $1.95 Billion Fine from Ripple

Alderoty announced  that the SEC has proposed a significant fine against his company. He mentioned that redacted versions of the relevant court documents should be disclosed by March 26.

The SEC’s request includes an order for Ripple Labs to disgorge $876 million, pay $198 million in prejudgment interest. It also includes a civil penalty of $876 million, culminating in a total sum of $1.95 billion.

Garlinghouse criticized  the SEC for demanding substantial penalties without alleging any fraud or recklessness in its claims. He argued such a request was unprecedented and claimed Ripple’s response would reveal the SEC’s overreach.

In a separate tweet, Garlinghouse critiqued  the SEC, pointing to a previous ruling that criticized the agency for not adhering strictly to the law in its dealings with Ripple.

Ripple Co-founder Critiques SEC’s ‘Unhinged’ Stance

Chris Larsen, Ripple’s co-founder and executive chairman, made a pointed remark  about the current state of the SEC under Chair Gary Gensler, describing it as “unhinged”.

He criticized  the agency for acting as if it were above legal standards, suggesting this attitude has contributed to the United States falling behind other countries in certain respects.

He highlighted  the importance of acknowledging the regulator’s shortcomings, especially in an election year. This implies that he believed a Republican win could bring about significant changes at the SEC, including Gensler possibly being replaced.

The lawsuit began in December 2020, with the SEC accusing Ripple of breaching federal securities laws through the sale of XRP to institutional and retail clients.

In July of last year, Judge Analisa Torres of New York ruled that the sale of XRP via exchanges and algorithms was not in violation of US law. Instead, she found, it was Ripple’s sales of XRP to institutions that contravened regulations.

SEC Fine for Ripple May Not Be Based on Current XRP Price

About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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