The U.S. Securities and Exchange Commission (SEC) seeks Ripple Labs to settle for a $1.95 billion fine, and they seek a New York court to decide the severity of the company’s acts.
The SEC’s request was part of a suggested final judgment that was sent to Judge Analisa Torres on Monday. There would be disgorgement of $876 million, prejudgment interest of $198 million, and a civil penalty of $876 million in addition to that.
SEC Ripple Legal Standoff
The primary focus of the SEC’s case is that Ripple’s action is severe and pervasive. They emphasize the need for a strong deterrent message to Ripple and other companies that are considering raising money through unregistered crypto-asset transactions. This perspective was set out in the court document, which revealed that the regulator had concerns about keeping the market upfront.
Since several years ago, XRP has been in a legal dispute with the SEC because the SEC states it raised $1.3 billion by selling XRP, which it regards as an unregistered security.
There was encouraging news for XRP last year when Judge Torres said that some sales of XRP, called programmatic, did not violate securities rules because they used a blind bid process. She did agree with the SEC, though, that sales directly to institutional investors were securities deals, thereby she sided with them.
The SEC states that XRP made nearly $1 billion from direct sales to institutions without permission, which is against the regulations for selling securities and might damage the financial markets. In the perspective of the SEC, XRP substantial profits without following the rules set an undesirable example.
In response, Ripple’s executives criticized the SEC’s method. Stuart Alderoty, Ripple’s lawyer, stated that the regulator was operating unjustly and circulating misinformation. As required by the SEC, XRP plans to send a written answer by April 22.
