Garlinghouse Says SEC to Press Judge for $2B in Fines and Penalties in Ripple Case
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The U.S. Securities and Exchange Commission (SEC) is apparently asking a New York judge to levy a $2 billion judgment against Ripple Labs, according to social media posts from the crypto company’s CEO and chief legal officer on Monday.
The SEC’s motion for judgment and remedies, filed on Friday, remains under seal to outside parties. According to Stuart Alderoty, Ripple Labs’ chief legal officer, redacted versions of the documents will be publicly available by Tuesday, March 26.
The judgment would bring an end to this phase of the multi-year legal battle between Ripple Labs and the SEC, which began in December 2020 when the SEC filed suit against the crypto firm and its executives, alleging that they violated federal securities laws by selling XRP to both institutional and retail customers.
When it was filed, the action led to the widespread delisting or trading suspension of XRP from U.S. exchanges. A federal judge ruled last year that Ripple violated federal securities laws in directly selling XRP to institutional investors, though not in selling XRP to retail investors through exchanges.
Brad Garlinghouse, Ripple Labs’ CEO, suggested in his X (formerly Twitter) post that the company will fight back against the proposed judgement motion.
"The SEC plans to ask the Judge for $2B in a case that involved no allegations (let alone findings) of fraud or recklessness," Garlinghouse wrote. "There is absolutely no precedent for this. We will continue to expose the SEC for what they are when we respond to this."
Alderoty wrote that the company will file its response to the SEC’s motion next month, adding "As we all have seen time and time again, this is a regulator that trades in statements that are false, mischaracterized and designed to mislead … Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large. We trust the Court will approach the remedies phase fairly."
An SEC spokesperson declined to comment.
UPDATE (March 25, 2024, 20:45 UTC): Adds response from SEC spokesperson.