Ripple challenges SEC’s $2 billion fine, proposes $10 million settlement instead Ripple challenges SEC’s $2 billion fine, proposes $10 million settlement instead
Ripple described the SEC's fine proposal as a "draconian remedial request."
2 min read
Updated: Apr. 23, 2024 at 12:27 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto company Ripple has responded to the Securities and Exchange Commission’s (SEC) pursuit of nearly $2 billion in fines by advocating for a different approach.
In a court filing dated April 22, Ripple proposed that the Court reject the SEC’s demands and instead impose a civil penalty not exceeding $10 million.
Stuart Alderoty, Ripple’s Chief Legal Officer, conveyed the company’s stance in a statement on the X (formerly Twitter) platform, stating that the case “had no allegations (or findings) of recklessness or fraud.”
Alderoty characterized the SEC’s demand as part of a broader pattern of intimidating actions against the crypto industry within the United States, noting that Ripple scored significant legal victories on matters in the case.
Ripple CEO Brad Garlinghouse added:
“The US will be picking up the pieces of the agency’s disastrous policies long after Gensler is gone.”
‘Changed ways’
Ripple said the SEC’s $2 billion fine request was further evidence of the regulator’s overreach and was ungrounded in law or principle.
The firm contended that the Gary Gensler-led agency’s demands hinged on speculative future violations. However, Ripple asserts it has adapted its XRP token sales method to align with court mandates.
It stated:
“[Ripple] has changed the way it sells XRP and changed its contracts to avoid the problems identified by this Court. It has ensured that its counterparties qualify as accredited investors. And its subsidiaries have obtained licenses to sell XRP as a digital currency outside the United States, under the supervision of regulators who do not treat XRP sales as sales of securities.”
The crypto company also noted that the regulator’s demand “exceeds by more than 20 times what it has obtained from any other defendant or respondent in a digital-asset case.”
Consequently, Ripple argued that the SEC failed to show that disgorgement was warranted and that prejudgment interest requests should also be rejected.
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In this article
The XRP Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers.
Ripple
Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.
Brad Garlinghouse stands at the forefront of financial technology as the CEO of Ripple.