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Ripple Says $10M Penalty Enough, Rejects SEC’s Ask of $1.95B Fine in Final Judgment

Apr 22, 2024
  • Ripple Labs has opposed the SEC’s proposal seeking a nearly $2 billion fine against the company.
  • Ripple Labs said the Court should impose a civil penalty of no more than $10 million.
On Monday, Ripple Labs submitted its objection to the US Securities and Exchange Commission’s (SEC) request for a New York court to levy approximately $2 billion in penalties against the organization managing the XRP Ledger blockchain.

The court is recommended to refuse the SEC’s applications for a restraining order, compensation for disgorgement, and pre-judgment interest, while imposing a fine of up to $10 million instead.

The SEC’s proposal requested the court to make Ripple Labs pay back $876 million due to disgorgement, add $198 million as prejudgment interest, and impose a civil penalty of $876 million, totaling $1.95 billion. The court determined that Ripple had broken federal securities laws by selling XRP to institutions but dismissed the SEC’s claims that selling XRP on exchanges and through algorithms was also against the law.

Ripple’s lawyers stated that the SEC’s additional requests are an indication of the excessive administrative control that has affected this case. The agency appears to consider itself as the victor and to have proven wrongdoing, but it has achieved neither. Furthermore, the SEC demands disgorgement which is prohibited by established Supreme Court and Circuit court rulings, and a fine that is over 20 times greater than what they have obtained from any other digital asset case defendant or respondent.

An extra point to note is that Ripple contended in a paragraph where they concealed their institutional sales revenue, the taxes they paid on income, and their losses, that they didn’t have any profits to forfeit.

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2024-04-23 10:43