The U.S. Securities and Exchange Commission is seeking $2 billion in fines and penalties in the case against Ripple Labs, according to the company’s chief legal officer.
The fines and penalties are sought in court documents filed under seal.
SEC seeks hefty fines
Ripple’s chief legal officer Stuart Alderoty shared details about the SEC’s request, saying that instead of enforcing the law, the SEC continues to work on punishing and intimidating Ripple and the larger crypto industry, adding that Ripple will sue them A response to the SEC’s proposal is expected next month.
“Rather than faithfully enforcing the law, the SEC is bent on punishing and intimidating Ripple and the entire industry. “Our response will be filed next month, but as we have seen time and time again, this regulator The statements made are false, mischaracterized and intended to mislead. Here they remain the same. “
The SEC is scheduled to publicly file the revised filing on Tuesday.
unprecedented demand
Ripple CEO Brad Garlinghouse called the $2 billion in damages sought by the SEC unprecedented because the case does not involve allegations or findings of fraud and recklessness. He also cited Debt Box as an example, accusing the SEC of violating the law. The committee was sanctioned by the judge overseeing the case, who accused the agency of acting in bad faith and abusing its power.
“We will continue to expose the truth about the SEC as we respond to this. The SEC under Gensler has repeatedly violated the law — and the judges did not ignore the agency’s “egregious abuse of the powers given to it by Congress” (DEBT Box case) and “ “Disloyal to the law” (Ripple case). Let us also not forget Gensler’s lack of concern for SBFraud.”
As of now, the SEC has not commented on the matter. District Judge Analisa Torres ruled in July that Ripple’s sale of $728.9 million worth of XRP to hedge funds and other sophisticated buyers amounted to an illegal sale of unregistered securities.
SEC and Ripple
The U.S. Securities and Exchange Commission sued Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen in 2020, accusing them of engaging in unregistered fraud by selling XRP Securities offerings illegally raised more than $1.3 billion. However, the commission dropped its remaining claims against Larson and Garlinghouse in October. The case has attracted widespread attention because it is the largest case brought by the SEC against an entity in the cryptocurrency space.
However, the SEC only achieved a partial victory in the case, with Judge Torres ruling in a major setback that XRP sold on public cryptocurrency exchanges did not meet the legal definition of a security. While Torres has rejected the SEC’s request to vacate the ruling while the case is ongoing, the commission may appeal again once a judge decides on his penalty request.
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