SEC Seeking $2 Billion in Fines From Ripple, According to Chief Legal Officer
On March 25, Ripple CLO Stuart Alderoty revealed that the SEC’s brief will be made public on Tuesday, March 26, and the regulator will be asking the judge for $2 billion in fines and penalties.
Alderoty added that the agency has asked U.S. District Judge Analisa Torres in Manhattan for the penalties in court papers filed under seal before stating:
“Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large.”
As you will see when the SEC’s brief is made public tomorrow, they ask the Judge for $2B in fines and penalties. 1/4 https://t.co/HM8dBbn7lp
— Stuart Alderoty (@s_alderoty) March 25, 2024
SEC Acting Outside The Law
Alderoty added that Ripple will file its response next month, “but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized, and designed to mislead.”
The SEC sued Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in 2020. It accused them of illegally raising around $1.3 billion in an unregistered securities offering of its native token, XRP.
Ripple CEO Brad Garlinghouse also had some choice words for the SEC and its chair, Gary Gensler.
“Gensler’s SEC has repeatedly acted outside the law,” he said before adding, “not going unnoticed by Judges admonishing the agency for a “gross abuse of the power entrusted to it by Congress” (DEBT Box case) and for acting without “faithful allegiance to the law” (Ripple case).”
He said that the case “involved no allegations (let alone findings) of fraud or recklessness” before adding, “There is absolutely no precedent for this.”
Gensler’s SEC has repeatedly acted outside the law – not going unnoticed by Judges admonishing the agency for a “gross abuse of the power entrusted to it by Congress” (DEBT Box case) and for acting without “faithful allegiance to the law” (Ripple case). Let’s not also forget… https://t.co/vay6WDBfJc
— Brad Garlinghouse (@bgarlinghouse) March 25, 2024
Judge Torres awarded a partial victory for Ripple when she ruled that XRP sold on public cryptocurrency exchanges did not meet the legal definition of a security. Furthermore, she denied the SEC’s repeal request while the case was in progress.
John E. Deaton’s ‘CryptoLaw’ channel wrote, “No fraud nor any harm to those investors was alleged. Just a failure to register,” before adding:
“For the retail investors who suffered $15B in losses from the SEC’s failed embodiment theory? Nothing. On what planet is this ok?”
XRP Price Outlook
There was little reaction on XRP spot markets, which have followed the wider market up today. The asset has gained 2% on the day to trade at $0.644 at the time of writing, according to CoinGecko.
XRP has generally lagged the rest of the crypto market this year, however. It has only managed to gain 5.5% since the beginning of 2024, whereas the total market capitalization is up 57%, primarily driven by Bitcoin.
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