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Ripple Facing SEC Demand for $2 Billion in Fines
Ripple’s CEO Brad Garlinghouse and CLO Stuart Alderoty disclosed that the Securities and Exchange Commission (SEC) is pursuing an enormous $2 billion in fines and penalties. These revelations came as a shock to the executives, who revealed that the fines were proposed in a court filing set to be unveiled on March 26.
Unprecedented Allegations by SEC
Garlinghouse expressed his astonishment at the SEC’s request for substantial penalties, especially since the allegations did not involve any fraud or recklessness. He denounced the SEC’s actions as unprecedented and claimed that Ripple’s response would expose the regulator’s questionable motives.
In a scathing tweet, Garlinghouse criticized the SEC for its lack of adherence to the law, highlighting a previous ruling that called into question the regulator’s commitment to legal principles.
Chris Larsen, Ripple’s co-founder and executive chairman, echoed Garlinghouse’s sentiments by describing the SEC, under Gensler’s leadership, as being “unhinged.” Larsen accused the SEC of behaving as if it were above the law and emphasized the negative impact of the regulator’s actions on the country.
Larsen also pointed out that the SEC’s failings should not be overlooked, particularly in an election year, suggesting that a change in leadership following the upcoming elections could lead to a restructuring of the SEC.
Regulator’s Alleged Misconduct
Separately, Alderoty claimed that the SEC was intent on punishing and intimidating Ripple, using false and misleading statements to further its agenda. He criticized the regulator for its mischaracterization of facts and attempts to mislead the public.
Clarification on Fines and Sales Figures
Earlier speculations hinted at Ripple facing fines exceeding $2 billion due to institutional sales of XRP. However, recent findings indicated that the total fine amount might not be solely based on these sales figures.
Despite initial estimations, the current price of XRP, standing at $0.66 as of March 25, could affect the final calculation of fines. Additionally, programmatic sales of XRP, including on-exchange transactions, were deemed non-securities, potentially impacting the overall fine imposed by the SEC.
Moreover, allegations related to personal XRP sales by Garlinghouse and Larsen were dropped by the SEC, suggesting that these transactions might not contribute significantly to the total fine amount demanded by the regulator.
In conclusion, Ripple’s executives’ revelations shed light on the SEC’s aggressive pursuit of fines and penalties, raising concerns about the regulator’s conduct and motivations in its dealings with the company.
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