Leading cross-border payment protocol Ripple is contesting the United States Securities and Exchange Commission’s (SEC) proposal to impose a staggering $2 billion fine on the blockchain company. In a recent legal filing, Ripple argued that the penalty should be capped at $10 million, challenging the SEC’s punitive measures.
The filing, submitted to a federal judge, rebuts the SEC’s request for an injunction, disgorgement, and pre-judgment interest against Ripple. Ripple asserts that the SEC’s punitive demands lack legal merit and exceed reasonable boundaries. The filing stated:
“Ripple intends to comply with future guidelines and has ample incentive to do so. The SEC’s excessive demands lack legal basis or ethical foundation. This Court should reject them outright.”
The SEC’s proposal includes a demand for Ripple to pay $876 million in disgorgement, $198 million in pre-judgment interest, and an additional $876 million in civil penalties, totaling close to $2 billion. Ripple unveiled the exorbitant fine request nearly a month ago, revealing the SEC’s relentless pursuit to penalize and deter both Ripple and the wider crypto industry.
Ripple labeled the proposed fine as “unreasonable,” advocating instead for a penalty that aligns with a portion of its actual revenues, which they redacted from the document. The filing argued that a $10 million penalty would be proportionate to similar cases in the digital asset space, especially where no reckless behavior or fraud was alleged or found.
Stuart Alderoty, Ripple Labs’ chief legal officer, condemned the SEC’s actions as a form of “ongoing intimidation against all of crypto” in the United States. He emphasized that the case lacks allegations or findings of recklessness or fraud on Ripple’s part. Alderoty expressed hope that the judge would objectively consider Ripple’s stance during the final remedies phase of the case.
