Ripple Faces Massive $2 Billion SEC Fine Proposal, CEO Calls Regulator ‘Unhinged

Ripple Faces Massive $2 Billion SEC Fine Proposal, CEO Calls Regulator ‘Unhinged

Crypto News – Ripple CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty have disclosed that the U.S. Securities and Exchange Commission (SEC) is pursuing a substantial $2 billion in fines and penalties against the company.

As revealed by Ripple’s executives, this significant penalty has been proposed in a court filing slated for unsealing on March 26.

Describing the SEC’s actions as “unhinged,” Garlinghouse criticized the regulatory body for seeking such hefty penalties despite the absence of allegations of fraud or recklessness. He emphasized the unprecedented nature of the SEC’s request and vowed that Ripple’s response would unveil the regulator’s actions.

In a scathing tweet, Garlinghouse referenced a previous decision that had cast doubt on the SEC’s adherence to the law in its dealings with Ripple.

Chris Larsen, Ripple‘s co-founder and executive chairman, echoed similar sentiments, characterizing the SEC under Gary Gensler as having gone “unhinged.” Larsen accused the regulatory body of assuming an above-the-law attitude, which he argued had hindered the United States‘ progress compared to other nations. He stressed the importance of holding the regulator accountable, particularly in an election year.

Meanwhile, Alderoty asserted separately that the SEC’s actions reflected a desire to punish and intimidate Ripple. He criticized the regulator for making false and misleading statements.

Regarding the fines related to institutional sales, previous speculations had hinted at a potential fine exceeding $2 billion based on the sales of XRP, which were considered securities offerings in prior rulings.

On February 26, a court filing by Ashley Prosper identified 4.9 billion XRP in institutional sales, prompting estimates of fines totaling $2.6 billion based on a token price of $0.55.

However, with XRP’s price slightly higher at $0.66 as of March 25, the value of the same 4.9 billion XRP would amount to $3.2 billion. This suggests that the SEC’s proposed fine is either not based on the current XRP price or is lower than the total institutional sales amount.

Notably, the SEC dropped allegations against Garlinghouse and Larsen’s personal XRP sales, which were not considered securities. Hence, those sales likely did not factor into the SEC’s current fine proposal.