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SEC proposes $2 billion fine against Ripple

The U.S. Securities and Exchange Commission (SEC) is reportedly pursuing a $2 billion penalty against Ripple Labs, as stated by Ripple’s Chief Legal Officer Stuart Alderoty.

This request is part of a legal filing that remains under seal, but public disclosure is expected soon. The move escalates the ongoing legal dispute initiated by the SEC in December 2020, alleging Ripple raised $1.3 billion through sales of XRP tokens, which the regulator considers unregistered securities.

Ripple’s executives have publicly responded to the SEC’s latest action, challenging the regulator’s approach and intentions. Alderoty criticized the SEC for what he perceives as an attempt to punish and intimidate Ripple, suggesting the regulator’s statements are misleading.

Similarly, Ripple CEO Brad Garlinghouse expressed disbelief over the unprecedented size of the fine and committed to revealing the SEC’s actions in their forthcoming response planned for April.

The case has been marked by its complexities, including a July 2023 ruling by Judge Analisa Torres, who identified XRP not as a security in relation to programmatic sales on digital asset exchanges. This partial victory for Ripple shifted the momentum in the case, prompting the SEC to move to dismiss charges against individual executives Garlinghouse and co-founder Chris Larsen with prejudice in October 2023.

Last month, Ripple’s CEO, Brad Garlinghouse, criticized the SEC for being “extremely antagonistic,” labeling SEC Chairman Gary Gensler as a “political burden” and critiquing his regulatory approach to the cryptocurrency sector as ineffective. Ripple is just one of numerous firms that have come under the SEC’s scrutiny lately. The regulatory body has taken legal action against several prominent U.S. cryptocurrency exchanges and financial institutions, accusing them of consistently selling digital tokens that were not registered as securities.

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