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Ripple Faces $2 Billion SEC Penalty
In a significant development, the U.S. Securities and Exchange Commission is set to pursue $2 billion in penalties from Ripple, as confirmed by Stuart Alderoty, the company’s chief legal officer. This announcement was made via Twitter on Monday, where Alderoty stated that the regulatory body would be seeking this substantial fine from a judge imminently. He noted that the SEC’s forthcoming legal brief would outline their request for the significant sum in fines and penalties, emphasizing the gravity of the situation.
“Our response will be filed next month, but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized and designed to mislead. They stayed true to form here.” – Stuart Alderoty
Alderoty further criticized the SEC’s approach, accusing them of disseminating false and misleading information intended to deceive. He suggested that the regulator’s actions were geared towards punishing and intimidating Ripple, as well as the broader industry as a whole. The contentious relationship between Ripple, the company responsible for the XRP cryptocurrency, and the SEC has been marred by ongoing legal disputes since 2020.
The SEC initiated a lawsuit against Ripple, seeking $1.3 billion in damages due to allegations of selling unregistered securities in the form of XRP, which currently ranks as the sixth largest cryptocurrency in terms of market capitalization. Despite facing legal setbacks, Ripple achieved a noteworthy victory when a judge ruled that sales of XRP to retail investors did not amount to unregistered securities.
While the court acknowledged that institutional sales totaling $728 million constituted unregistered securities sales, it was seen as a positive outcome by investors and Ripple Labs, marking a symbolic triumph for the cryptocurrency industry at large. In response to the ongoing legal battle, Ripple CEO Brad Garlinghouse criticized the SEC, labeling the regulatory body as “very hostile” and expressing disillusionment with its approach to overseeing the crypto sector.
Notably, Ripple’s clash with the SEC is part of a broader trend where the regulatory agency has taken action against various entities within the cryptocurrency space. Major American crypto exchanges and financial service providers have been targeted with lawsuits, alleging violations related to the sale of unregistered securities through digital tokens.
As the legal proceedings continue, both Ripple and the SEC remain steadfast in their positions, with each side vigorously defending their stance. While the SEC opted not to provide further comments on the matter, Ripple refrained from issuing a statement when approached by Decrypt for response at the time of this report.
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