A new twist in the legal battle between the Securities and Exchange Commission (SEC) and Ripple Labs. The US regulator is reportedly seeking $2 billion in fines from Ripple, the company behind the XRP token.
Is Ripple the SEC’s scapegoat ?
According to Stuart Alderoty, Ripple’s General Counsel, the U.S. Securities and Exchange Commission (SEC) is seeking $2 billion in fines and penalties from the XRP issuer.
The fine, contained in a still confidential legal document, is part of the legal case opened by the SEC in December 2020. The charge relates to a fundraising operation carried out by Ripple via the sale of XRP tokens to the tune of $1.3 billion. The US regulator considers these assets to be unregistered financial securities.
Faced with this offensive, Ripple’s executives were quick to jump on the bandwagon. The company’s General Counsel, Stuart Alderoty, denounced the SEC’s attempt at intimidation and punishment, questioning the veracity of the regulator’s arguments. According to Stuart Alderoty and Brad Garlinghouse, Ripple’s CEO, the court documents will be made available to the public later today.
Ripple’s CEO also expressed his amazement at the astronomical amount of the fine on X. He promises to lift the veil on the SEC’s actions in a response scheduled for April 2024.
“The SEC intends to ask the judge for a $2 billion fine in a case that involves no charges (much less findings) of fraud or recklessness. There is absolutely no precedent for this. We will continue to denounce SEC’s practices in our response.”
A partial victory for XRP
In July 2023, Judge Analisa Torres ruled in Ripple’s favor on a crucial point: the XRP token could not be classified as an unregistered security for public sale. But for institutional sales, it could be classified as such.
By October 2023, this partial victory had marked a turning point in the case, prompting the SEC to drop charges personally targeting Brad Garlinghouse and Ripple co-founder Chris Larsen.
Ripple’s standoff with the SEC is not an isolated case in the world of digital assets and blockchain. Back in February, Ripple’s CEO denounced the excessive hostility of the American regulator. He openly criticized the regulatory approach of its chairman, Gary Gensler, towards the cryptocurrency sector as ineffective.
Ripple is one of a long list of companies under scrutiny by the SEC. The regulator has taken legal action against several crypto exchange platforms, including Coinbase and Binance. Several major financial institutions are also being targeted, accused of continually marketing digital assets not registered as financial securities.
Source : Coindesk
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