Ripple, a cross-border payments protocol, has pushed back against the U.S. Securities and Exchange Commission (SEC) by challenging its request for a hefty $2 billion fine against the blockchain company. In a recent filing, Ripple Labs objected to the SEC's plea for a federal judge to impose such a substantial penalty, arguing that it should not exceed $10 million. The company also urged the court to reject the SEC's demands for an injunction, disgorgement, and prejudgment interest.
According to Ripple, the SEC's proposed fine lacks legal or doctrinal basis and is excessively draconian. The company emphasized its intention to comply with regulatory guidance in the future and asserted that it has every incentive to do so. Ripple deemed the SEC's request for redress as unreasonable and called for its rejection in its entirety, emphasizing the absence of legal grounds for such punitive measures.
In its filing, Ripple disclosed that the SEC is seeking a staggering $876 million in disgorgement, $198 million in prejudgment interest, and an additional $876 million in civil penalties, totaling close to $2 billion. This revelation came about a month ago when Ripple Labs' chief legal officer, Stuart Alderoty, disclosed the SEC's request to impose the fine. Alderoty criticized the SEC's relentless pursuit of punitive measures against Ripple and the broader cryptocurrency industry.
Ripple argued that a $10 million fine would be more proportionate, representing a reasonable portion of its actual revenue. The company highlighted that this amount aligns with comparable digital asset cases where no guilty mental state or significant harm to others was established. Alderoty condemned the SEC's actions as evidence of its ongoing intimidation of cryptocurrencies in the United States, emphasizing the absence of allegations or findings of recklessness or fraud in the case.
Legal representatives for Ripple expressed confidence in their defense, noting that the company had prevailed on significant issues. They expressed hope that the judge overseeing the case would exercise fairness in the final remediation phase, suggesting a more reasonable approach to fines and penalties.
