In a recent filing with the U.S. District Court for the Southern District of New York, the United States Securities and Exchange Commission (SEC) revealed its proposal for fines.
In a recent filing with the U.S. District Court for the Southern District of New York, the United States Securities and Exchange Commission (SEC) revealed its proposal for fines and penalties against blockchain firm Ripple. The SEC's attorneys recommended that Ripple pay approximately $1.95 billion in disgorgement, prejudgment interest, and civil penalties for its alleged violation of securities laws.
The proposed breakdown includes $876,308,712 in disgorgement, $198,150,940 in prejudgment interest, and an additional $876,308,712 as a civil penalty. The SEC argued that these penalties were appropriate due to Ripple's "defiance of the law" by continuing to sell its XRP tokens after receiving legal warnings.
Highlighting the need for a substantial civil penalty, the SEC stated, "Ripple is well-positioned to pay a significant civil penalty," emphasizing that it should not be merely a cost of doing business for a securities law violator. The regulator also stressed the importance of deterrence, pointing to Ripple's extensive unregistered sales of XRP over the past three years.
Ripple's Chief Legal Officer, Stuart Alderoty, had previously anticipated the SEC's proposed fines and penalties to be “roughly $2 billion,” and described them as an attempt to "punish and intimidate" Ripple. He stated that the company planned to file a response to the proposed judgment in April.
The lawsuit was initially filed by the SEC in December 2020, targeting Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen. The SEC alleged that Ripple raised $1.3 billion through the sale of unregistered securities in the form of XRP tokens. Judge Analisa Torres ruled in July 2023 that XRP was not a security in the context of programmatic sales on digital asset exchanges.
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