SEC vs Ripple has been one of crypto’s most intense legal fights. Since 2020, the regulator has accused the blockchain firm of offering XRP as an unregistered security. The court however ruled that the Ripple-affiliated token was not a security but that the offering to institutional investors violated federal law. The legal fight escalated when the regulator initially sought $2 billion. However, after Ripple expressed willingness to pay up to $10 million, the regulator scaled back its demands.
Now the SEC is insisting on a $103 million penalty, saying it was necessary to “deter future misconduct in the crypto industry.” On June 13th, Ripple requested that the judge presiding over its case with the regulator ensure that the company pays “no more than $10 million” in penalties. The $10 million figure is just a fraction of the $876 million civil penalty proposed by the SEC. Ripple defended the amount citing the recent $4.47 billion settlement between Terra and the regulator which included just a $420 million civil penalty, as a benchmark for fairness.
However, the SEC pushed back, highlighting that Terraform Labs met three specific criteria in their settlement: the firm declared bankruptcy, agreed to return funds to investors, and fired the leaders who oversaw the alleged offenses. The regulator pointed out that Ripple meets none of these criteria and is “agreeing to nothing.”
$2B Penalty Demand from SEC
In total, the commission is seeking around $2 billion from Ripple, including an $876 million civil penalty and $876 million in disgorgement. Ripple, on the other hand, continues to fight back, arguing for a much lower penalty.
The court has yet to make a final decision on the penalty, if any, that Ripple should pay. As the crypto industry follows the events closely, the outcome of this case could set a significant precedent for future regulatory actions and enforcement in the rapidly evolving world of digital assets.