Ripple proposes ‘no more than $10M’ in penalties after SEC seeks $1.9B
Ripple and the SEC have been locked in a years-long legal battle that started in 2020
JLStock/Shutterstock modified by Blockworks
Ripple Labs pushed back against the Securities and Exchange Commission’s request for the court to impose nearly $2 billion in fines.
“In a case that had no allegations (or findings) of recklessness or fraud, and in which Ripple won on significant issues, the SEC’s ask is just more evidence of its ongoing intimidation against all of crypto in the US,” Ripple’s Chief Legal Officer Stuart Alderoty said in a post on X.
In the filing, Ripple argued that the SEC didn’t allege “fraud, deceit” or manipulation and the case failed to “show that Ripple recklessly disregarded the law.”
Instead, Ripple argued, the court should impose a penalty of “no more than $10 million.”
Ripple argued that while any violation of the Securities Act is a “serious matter,” the company’s violation doesn’t warrant such a high penalty.
“Ripple’s Institutional sales are far less egregious,” the filing said, than other crimes such as commingling funds or fraud.
Read more: Ripple, SEC argue to the very end of years-long legal battle
Last summer, Judge Analisa Torres found that Ripple’s institutional sales fell under securities sales under Howey. However, the judgment wasn’t a total win for the SEC because Torres also found that the programmatic sales of XRP didn’t constitute the offer of investment contracts under Howey.
In a March filing, the SEC disclosed that it would seek nearly $2 billion in penalties against the company. Alderoty and CEO Brad Garlinghouse took to X to announce the sum before the official release of the SEC’s filing.
Last month, Garlinghouse said that the SEC had acted “outside the law” and cited the DEBT Box case in which the SEC was recently sanctioned.
The two have been locked in a years-long legal battle that started in 2020. Ripple, alongside Garlinghouse and co-founder Chris Larsen, were accused of raising over $1.3 billion illegally by the SEC.
At the end of last year, the regulator said it wouldn’t pursue a trial against Garlinghouse or Larsen.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
