Ripple Labs accuses the SEC of trying to ‘punish and intimidate’ by seeking $2 billion in penalties from XRP developer
Angle down icon
An icon in the shape of an angle pointing down.
Jack Taylor/Getty Images
- The SEC is seeking fines and penalties worth $2 billion from Ripple Labs, its legal chief said.
- Stuart Alderoty said the SEC wanted to “punish and intimidate Ripple” and the wider crypto sector.
- Ripple is behind XRP, the sixth-largest cryptocurrency by market capitalization.
The US’s top financial watchdog is seeking penalties worth billions of dollars from Ripple Labs, the company behind the XRP cryptocurrency, its chief legal officer said.
Stuart Alderoty wrote on X that the Securities and Exchange Commission asked US District Judge Analisa Torres to fine Ripple $2 billion. He added that the SEC would make a redacted version of its court papers public on Tuesday.
“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,” Alderoty said.
“Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple — and the industry at large.”
The SEC sued Ripple, its CEO Brad Garlinghouse, and cofounder Chris Larsen in 2020, although it dropped its claims against Garlinghouse and Larsen last year.
In July, Torres ruled that Ripple’s sales of XRP on public exchanges hadn’t violated US trading laws. However, it found that Ripple had unlawfully offered unregistered securities when it sold $728.9 million worth of the token to hedge funds and other institutional investors.
Ripple will file a reply next month before the case goes to trial, Alderoty said.
The former American Express and HSBC general counsel isn’t the first of the blockchain company’s execs to criticize the SEC.
In January, Garlinghouse told the World Economic Forum in Davos that chair Gary Gensler was a “political liability” because of his track record of regulating crypto, adding that the financial watchdog’s crusade against the digital asset space was the “definition of insanity”.
As well as suing Ripple, the SEC rejected spot bitcoin ETFs for more than a decade before finally approving 11 earlier this year. It’s also brought lawsuits against big crypto exchanges including Coinbase, Binance, and Kraken.
XRP is the world’s sixth-largest cryptocurrency by market capitalization, per data from CoinMarketCap. It was worth just over $35 billion on Tuesday.
Neither the SEC nor Ripple immediately responded to requests for comments from Business Insider.