Ripple Labs Rejects SEC’s $2 Billion Fine Proposal
Ripple Labs is pushing back against the U.S. Securities and Exchange Commission (SEC)’s proposal to fine the company nearly $2 billion for alleged violations of federal securities laws related to its XRP cryptocurrency. Instead, the company is requesting a much smaller penalty of $10 million.
The SEC had initially requested that the court order Ripple Labs to pay $876 million in disgorgement, $198 million in prejudgment interest, and a $876 million civil penalty, totaling $1.95 billion. However, Ripple Labs filed its opposition on Monday, arguing that the proposed penalty is excessive and not in line with precedent in similar cases.
Ripple Labs’ Opposition to SEC’s Remedial Requests
Ripple’s legal team states that the SEC’s requests for an injunction, disgorgement, and pre-judgment interest are evidence of overreach and that the agency has not proven reckless conduct on Ripple’s part. They also point out that the proposed disgorgement, which would include revenue from institutional sales, tax payments, and losses, would leave no gains for Ripple to disgorge.
The filing also notes that the SEC’s proposal includes a separate penalty that is more than 20 times higher than any previously obtained in a digital asset case, further highlighting the agency’s disproportionate approach.