SEC Seeks Record $2 Billion Fine Against Ripple Labs

Court filings indicate that the U.S. Securities and Exchange Commission (SEC) has persuaded a New York judge to impose a substantial penalties of about $2 billion on Ripple Labs.

Stuart Alderoty, chief legal officer of Ripple Labs, claims that the SEC is pressing for this hefty penalties. Alderoty said on social media that the court files with redacted portions and the SEC’s request will be made public by March 26.

In all, Ripple Labs would be subject to a $1.95 billion fine, which would include a $876 million disgorgement, $198 million in prejudgment interest, and a $876 million civil penalty, according to the SEC’s plan.

Legal Battle Background

When the SEC filed a lawsuit against Ripple Labs and its executives in December 2020, the legal drama got underway. By offering XRP for sale to both institutional and retail clients, the SEC claimed that they had broken federal securities laws. In a landmark decision in July, New York Judge Analisa Torres found that although Ripple’s institutional sales of XRP violated US law, the sale of XRP on exchanges and through algorithms did not.

The SEC filing emphasized the need for strict enforcement, stating, “The SEC asks the Court to consider how easily actors, particularly in the crypto asset space, can today engage in the same sort of conduct as Ripple’s and send a strong message that such abuses will not be tolerated.”

Alderoty expressed disapproval of the SEC’s position and verified that Ripple Labs will present their reply to the SEC’s proposal the following month. The SEC complaint states that Ripple Labs has until April 22, 2024, to respond.