US SEC Wants $2B for XRP Lawsuit, Ripple Says Never

Ripple’s Chief Legal Officer says the company is not going to yield to the SEC’s $2 billion demand. 

In a recent development, the United States Securities and Exchange Commission (SEC) is seeking fines and penalties totaling $2 billion in its case against Ripple Labs over sales of the cryptocurrency XRP, according to Ripple Chief Legal Officer Stuart Alderoty in a post on X. He also disclosed that Ripple would not be complying with the regulator’s demands and its response will be filed next month. 

“We all have seen time and again, that this is a regulator that trades in statements that are false, mischaracterized, and designed to mislead. They stayed true to form here. Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large”, Alderoty stated.

The watchdog has asked the presiding judge, Analisa Torres for the penalties in court papers filed under seal. According to Alderoty, the SEC was scheduled to file the documents publicly with redactions on Tuesday, March 26.

Genesis of the Lawsuit 

Recall that Ripple and SEC’s legal tussle began way back in December 2020 when the regulator sued the company, its CEO Brad Garlinghouse, and co-founder Chris Larsen, accusing them of illegally raising more than $1.3 billion in an unregistered securities offering by selling XRP. Ripple refuted the charges, noting that XRP should be treated as a digital asset like Bitcoin and Ethereum. 

Last year, a federal judge partly ruled in favor of the SEC saying that Ripple violated federal securities laws in directly selling XRP to institutional investors. However, the judge also stated that XRP Ripple sold on public cryptocurrency exchanges did not meet the legal definition of a security.

Displeased with the court’s ruling, the SEC moved to appeal the case arguing that the part of the ruling that states XRP did not violate securities laws when sold to retail traders because they do not have similar expectations as institutional investors was wrongly decided. The judge however denied the SEC’s request saying that the watchdog failed to provide substantial grounds for a change in ruling.

The next trial on the XRP security is scheduled to commence next month hopefully, the judge will make a final ruling on the case bringing an end to one of the biggest lawsuits brought by the SEC in the cryptocurrency scene.