Ripple has intensified its battle with the SEC, which took a significant step by requesting nearly $2 billion in penalties from the company. We have seen the SEC suffer defeats in various cases. In the path to a spot Bitcoin ETF approval, Grayscale had also bested them, and the SEC’s follies have now become the “new normal.” So, what are the details of this latest move?
Ripple’s Legal Battle
The company behind XRP Coin, Ripple, has been continuing its legal battle with the SEC since the end of 2020. The Hinman documents, the Howey test, and dozens of other issues have been occupying a corner of our minds for years. However, this case has turned into a never-ending story and is still unresolved.
Although the summary judgment ruled that the sale of XRP Coin on exchanges was not a security, the SEC had won a decision in its favor regarding institutional sales. Now the SEC wants to impose a deterrent penalty on the company for not complying with the rules.
In an application made on March 25th at the U.S. District Court for the Southern District of New York, SEC lawyers are seeking court approval for a total of $1.95 billion in penalties across three categories.
- $308,712 in Disgorgement
- $150,940 in Prejudgment Interest
- $308,712 in Civil Penalties
SEC’s Stance on Ripple
SEC lawyers claim that the company can easily afford to pay this fine. Jeremy Hogan criticizes this approach, saying, “How far back is the SEC taking this? They’re asking Ripple for $2 billion, which will require Ripple to sell a lot of XRP, potentially driving the price down and harming individual investors (you).”
According to the regulatory body, the fines and penalties show that Ripple, after legal warnings, continued to sell XRP and is willing to bear this cost.
“Ripple is in a good position to pay a significant civil penalty. As the Second Circuit has also noted, we know that a civil penalty for a person violating securities law should not merely be the cost of doing business. Considering the tremendous amount of unregistered sales by Ripple over the last three years, the penalty amount is quite deterrent.”
Ripple’s Chief Legal Officer Stuart Alderoty stated that the SEC aims to “punish and intimidate” Ripple and announced they will respond in April.
