A recent filing by the United States Securities and Exchange Commission (SEC) outlining proposed fines and penalties for blockchain company Ripple presents a contrasting narrative to that put forward by the company’s executives.
In a court filing on March 25th, the SEC’s attorneys suggested that Ripple should pay a total of $1.95 billion in disgorgement, prejudgment interest, and civil penalties. The regulator justified these sanctions by citing Ripple’s “defiance of the law” and its continued sale of XRP tokens despite legal warnings.
The SEC stated, “Ripple is in a strong position to pay a significant civil penalty,” adding that such a penalty was necessary to ensure that securities law violators do not view it as merely a cost of doing business. The regulator also emphasized the need for deterrence, given Ripple’s extensive unregistered sales of XRP over the past three years.
The filing aligns with the expectations set by Ripple’s Chief Legal Officer, Stuart Alderoty, in a post on the company’s website. Alderoty had predicted that the SEC would seek fines and penalties totaling around $2 billion and accused the regulator of seeking to “punish and intimidate” Ripple. He also revealed that the company plans to respond to the proposed judgment in April.
The SEC’s proposed order also mentioned that the lawsuit, filed by the regulator against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, alleges that the company raised $1.3 billion through the sale of unregistered securities in the form of XRP tokens. The case gained attention in the cryptocurrency industry when Judge Analisa Torres ruled in July 2023 that XRP did not qualify as a security in relation to programmatic sales on digital asset exchanges.