Key Takeaways:
- Ripple Labs is contesting the SEC’s proposed $2 billion fine, advocating for a much lower penalty of $10 million, arguing that the SEC’s demands are excessive and not based on law.
- The SEC’s fine includes $876 million in disgorgement, $198 million in pre-judgment interest, and another $876 million in civil penalties. Ripple criticizes these figures as “Draconian” and disproportionate to their actual revenue.
- Ripple’s legal challenges underscore a broader contention within the crypto industry regarding the U.S. regulatory approach to digital assets, emphasizing no intentional misconduct or harm in their case.
In a recent legal maneuver, Ripple Labs has contested the United States Securities and Exchange Commission’s (SEC) hefty fine proposal, advocating for a substantially lower penalty.
The cross-border payment firm argued against the SEC’s suggestion to a federal judge, which could see Ripple facing nearly $2 billion in fines, urging the court to cap the civil penalty at $10 million instead.
🚨BREAKING: @Ripple has contested the SEC’s request for a $2 billion fine related to #XRP sales, asserting that most transactions were lawful and informed, proposing a maximum penalty of $10 million instead. 👀
— JackTheRippler ©️ (@RippleXrpie) April 23, 2024
RIPPLE IS READY TO CLOSE THE CASE! 🔥 pic.twitter.com/9Jd4MY0wIQ
The contentious proposal from the SEC includes a call for Ripple to pay $876 million in disgorgement, along with $198 million in pre-judgment interest and an additional $876 million in civil penalties, amounting to just under $2 billion.
This was first disclosed by Ripple’s chief legal officer, Stuart Alderoty, on March 25, highlighting the intense scrutiny the firm faces from the regulator.
Our opposition to the SEC’s request for $2B in penalties for legacy institutional sales is now public. In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s ask is just more evidence of its ongoing… https://t.co/GLcdsyInZW
— Stuart Alderoty (@s_alderoty) April 23, 2024
Ripple’s recent court filing criticizes the SEC’s demand as excessive and not founded in either law or reason, labeling the remedial requests as “Draconian.”
The company has made it clear that they intend to comply with legal guidance moving forward, and see no justification for the SEC’s exaggerated penalty figures.
The filing also states that a more reasonable penalty of $10 million would reflect a fair portion of their actual revenues, though specific figures were redacted for confidentiality.
Feels apropos that we file our response on the same day that 2 SEC lawyers “resign” for their (mis)conduct in the Debt Box case…
— Brad Garlinghouse (@bgarlinghouse) April 23, 2024
The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone. https://t.co/vQMHKG5kbW
Ripple argues that such an amount would be aligned with penalties in comparable cases involving digital assets where there were no findings of intentional misconduct or significant harm.
Alderoty has accused the SEC of attempting to intimidate not just Ripple but the broader crypto industry, emphasizing that the case against Ripple involved no allegations of recklessness or fraud.
Despite these challenges, Ripple claims to have secured victories on several key issues in the case and remains hopeful that the judge will consider these factors during the final remedies phase of the litigation.
#XRPCommunity #SECGov v. #Ripple #XRP@Ripple has filed its Opposition to the @SECGov's Motion for Remedies and Entry of Final Judgment.https://t.co/Q0OOay1jdt
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) April 23, 2024
Ripple’s stance not only challenges the SEC’s current position but also underscores the ongoing debates surrounding regulatory approaches to cryptocurrency and blockchain technology within the United States.
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