SEC Demands $2 Billion from Ripple Labs

Ripple Labs faces a $2 billion SEC penalty amid an ongoing legal battle over unregistered securities sales.

In a recent development, Ripple Labs is bracing for a $2 billion penalty sought by the US Securities and Exchange Commission (SEC). Stuart Alderoty, the Chief Legal Officer of Ripple, revealed this information through a Twitter post on Monday, indicating the SEC’s intention to press for the fine in an upcoming court session.

SEC’s Legal Battle with Ripple

The SEC, a key regulatory body overseeing securities in the United States, has been engaged in a prolonged legal conflict with Ripple, the entity behind XRP, a leading cryptocurrency. This clash stems from a lawsuit initiated by the SEC in 2020, accusing Ripple of conducting unregistered securities sales through its distribution of XRP, which currently ranks as the sixth-largest cryptocurrency in terms of market capitalization.

Ripple achieved a partial victory in this legal confrontation last year. A court ruling determined that Ripple’s programmatic sales of XRP to retail investors did not constitute the sale of securities. However, the same ruling deemed $728 million in contracts for institutional sales as unregistered securities transactions. This mixed verdict was for many, including Ripple Labs, a favorable outcome for the broader crypto market, despite the ongoing nature of the lawsuit.

The SEC’s aggressive stance towards Ripple is part of a broader trend of regulatory actions against various entities in the cryptocurrency industry. Major American crypto exchanges and lending platforms have also faced legal challenges from the SEC for allegedly engaging in the sale of unregistered digital tokens.