The U.S. Securities and Exchange Commission (SEC) is seeking a hefty fine of nearly $2 billion against Ripple Labs, as revealed in recent court filings.
Stuart Alderoty, the chief legal officer of Ripple Labs, expressed disapproval of the SEC’s move and announced that the company plans to respond to the SEC’s motion next month.
In its proposal submitted to a New York judge, the SEC is asking for Ripple Labs to pay a total of $1.95 billion. This amount includes $876 million for disgorgement, $198 million for prejudgment interest, and a $876 million civil penalty.
The legal dispute traces back to December 2020 when the SEC filed a lawsuit against Ripple Labs and its executives, alleging violations of federal securities laws through the sale of XRP to both institutional and retail customers.
A significant ruling came last July from New York Judge Analisa Torres, who determined that while the sale of XRP on exchanges and through algorithms did not breach U.S. law, Ripple’s institutional sales of XRP did.
In its filing, the SEC urged the court to consider the potential ease with which actors, particularly in the crypto asset space, could engage in similar conduct to Ripple’s. The SEC emphasized the importance of sending a strong message that such abuses will not be tolerated.
Alderoty’s criticism of the SEC was made public alongside the announcement of Ripple Labs’ intention to respond to the SEC’s motion by next month. The SEC specified that Ripple Labs’ response is due by April 22, 2024.
