Key Takeaways
- Ripple Labs opposes the SEC's request for a $1.95 billion fine, arguing that a maximum penalty of $10 million is more appropriate;
- Ripple states that the proposed penalties far exceed any past digital-asset case and are not aligned with court findings;
- Ripple denies having profits to return as disgorgement.
Ripple Labs has formally opposed the US Securities and Exchange Commission's (SEC) request for a New York judge to impose a $1.95 billion fine on the company.
However, Ripple argues that a penalty of up to $10 million would be more suitable.
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The breakdown of the SEC's requested penalties includes $876 million in disgorgement, another $876 million as a civil penalty, and $198 million in prejudgment interest.
This sum comes after the court concluded that Ripple had breached federal securities laws through its institutional sales of XRP, although it dismissed claims regarding the sale of XRP on exchanges and through automated algorithms as violations of the law.
In its defense, Ripple has accused the SEC of overreach and demanding penalties that are wildly disproportionate to the actual court findings. Ripple's filing stated:
The agency acts as though it had prevailed entirely and had proved reckless conduct. It has done neither. The agency also seeks disgorgement barred by controlling Supreme Court and Circuit precedent and a separate penalty that exceeds by more than 20 times what it has obtained from any other defendant or respondent in a digital-asset case.
Furthermore, Ripple claims it has no profits to return as disgorgement, citing financial losses on its institutional sales after accounting for taxes paid and other expenses.
This legal battle showcases the ongoing friction between regulatory agencies and crypto firms.
This tension became evident with SEC Chair Gary Gensler's recent post on X, which initially led many to mistakenly believe he was resigning and to publicly express disappointment when it was clarified that he was not stepping down.
