SEC Proposes $1.95 Billion in Fines and Penalties against Ripple for XRP Sales
Summary:
The U.S. Securities and Exchange Commission (SEC) has filed a proposal seeking nearly $1.95 billion in penalties, disgorgement, and interest from Ripple for selling XRP despite legal warnings. The SEC deemed Ripple financially capable of paying a hefty fine, as a deterrent to future violations. Ripple's chief legal officer claimed the SEC wanted to "punish and intimidate" the firm and plans to respond in April. This follows a December 2020 lawsuit accusing Ripple, its CEO, and co-founder of raising $1.3 billion through unauthorized security sales of XRP tokens.
The narrative that Ripple blockchain firm’s executives have been pronouncing seems to contradict the March 25 filing of the United States Securities and Exchange Commission (SEC). According to the filing by SEC attorneys in the U.S. District Court for the Southern District of New York, Ripple ought to pay close to $1.95 billion in total - consisting of $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and a civil penalty of $876,308,712. Citing Ripple's continual sale of XRP despite legal warnings as a "defiance of the law", the regulator deems these penalties suitable.
The SEC asserts that a substantial civil penalty is both necessary and deserved in this case, considering Ripple's financial health and the vast volume of unauthorised XRP sales over the past three years. It clarifies that the aim of such a penalty is not merely to cover the expense of business operations for a violator of securities law, but also to deter future legal transgressions.
This matches up with what Stuart Alderoty, Ripple's chief legal officer had suggested. In a March 25 post, Alderoty stated the SEC's intention was to impose about $2 billion in fines and penalties, which he felt was to "punish and intimidate" Ripple. He indicated that the company intends to answer back to this proposed judgment in the month of April.
According to the proposed SEC mandate, the hefty sanction from the court coupled with the repayment of Ripple's wrongful earnings is the only way the firm will amend its ways. This order was filed back in December 2020, alleging that Ripple CEO Brad Garlinghouse, co-founder Chris Larsen and the company itself, had obtained $1.3 billion from an unregistered security sale of XRP tokens. The lawsuit drew significant attention from the digital currency domain when, in July 2023, Judge Analisa Torres declared that XRP was not a security in relation to programmatic sales on digital asset exchanges.
Published At
3/26/2024 11:35:59 PM
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