- Ripple disputes SEC’s proposed $2 billion fine, arguing for a $10 million penalty.
- The legal dispute stems from the SEC’s claims of $1.3 billion in unauthorized XRP sales.
- Ripple emphasizes transparency and alignment with legal requirements despite legal conflicts in its institutional sales strategy.
Ripple Labs makes an official statement regarding the Securities and Exchange Commission (SEC) proposal to pay an almost $2 billion fine. In a recent court filing, Ripple contended that the appropriate fine should be about $10 million, significantly less than what the SEC is asking.
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Ripple’s Chief Legal Officer, Stuart Alderoty, criticized the SEC’s request, labelling it as a tactic of intimidation against the cryptocurrency sector in the United States. Alderoty stated that the company has prevailed on legal issues without any allegations of recklessness or fraud being proven.
Court Developments and Ripple’s Position
The legal conflict between Ripple and the SEC has persisted for several years, originating from the SEC’s allegations that Ripple raised $1.3 billion through unauthorised sales of its XRP token. However, in a significant development last year, Judge Analisa Torres found that not all XRP sales violated securities laws, pointing out that some transactions involved a blind bid process. Despite this, the SEC continues to assert that Ripple has conducted billions of dollars worth of institutional sales of unregistered security.
In their defence, Ripple mentioned changes made to their sales strategy after the court’s ruling, which they believe align with legal requirements. The company emphasized that its institutional sales were transparent, dealing with informed and sophisticated entities that understood the nature of the transactions.
Financial Adjustments and Legal Outlook
The SEC’s filing last month divided the proposed fines into $876 million in disgorgement, $198 million in prejudgment interest, and a civil penalty of $876 million. Ripple countered by questioning the justification for disgorgement and prejudgment interest and suggesting that a reasonable civil penalty should not exceed $10 million.
The firm reiterated that its actions were not severe and had dealt fairly with well-informed participants over the past eight years.
As the case approaches its conclusion, Ripple expressed confidence in the fairness of the upcoming judicial decisions, hopeful that the final ruling will reflect the complexities and nuances of the case rather than the inflated penalties proposed by the SEC.
Stakeholders in the cryptocurrency industry are keenly awaiting the resolution of this case, as it is expected to set important precedents for how digital assets are regulated and managed in the U.S. market.
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