SEC Seeks $2B in Penalties and Fines, Reveals Ripple Labs’ Chief Legal Executive
Ripple Labs chief legal executive Stuart Alderoty issued a preemptive revelation via a Monday, March 25 publication on X. The legal expert revealed in the post that the US Securities and Exchange Commission had sought $2 billion in punitive damages from the fintech firm in its filing.
SEC Accused of Punishing Ripple and Entire Crypto Industry
Alderoty indicated that the securities regulator had planned to submit on Tuesday, March 26, plead to the judge to order Ripple to pay $2 billion in penalties and fines for the alleged wrongdoing.
The experienced lawyer indicated that the Gary Gensler-led Commission is fond of trading statements engulfed in falsehood. The statements are mischaracterized and capture a misleading design with intentions of punishing and intimidating Ripple Labs and the entire crypto industry.
The preemptive post by Alderoty, who boasts over three decades of experience in legal matters, emerges as the Ripple versus SEC battle rages on since it began in 2020. The fintech firm behind native crypto XRP has vowed to defend the allegations vigorously.
Ripple Labs Affirm Vigorous Defense Against SEC’s Allegations
The securities regulator hit Ripple Labs with the $1.3 billion lawsuit accusing it of selling unregistered securities XRP, now the sixth largest crypto with a $35.574 billion market capitalization per CoinGecko.
Alderoty appears confident that Ripple will replicate the partial win granted by US District Judge Analisa Torres in July last year. The Manhattan judge held that the programmatic sales to the retail investors lacked qualification as a security per the Howey Test framework.
While Judge Analisa only indicated that $728 million contracts involved in institutional sales constituted unregistered security sales, the fintech firm and investors termed the ruling a critical win for the entire crypto industry.
Allderoty laments that the regulator is devoted to avoiding faithful application of the law, pointing out that the $2 billion penalties sought were captured in the SEC’s filings under seal. He illustrated that the SEC scheduled to file the documents publicly on Tuesday, March 26.
Ripple Labs Chief Labels SEC as Very Hostile
Alderoty’s attack on the SEC for regulation by enforcement echoes the pronouncement by Ripple chief executive Brad Garlinghouse that it is a very hostile agency. The chief profiled the SEC chair as a political liability, and the enforcement regulation proved unviable in the crypto industry.
Ripple Labs is among the crypto firms the SEC has recently undertaken legal action against. In the last year, the financial watchdog has cast the net wider by hitting major crypto lenders and exchanges, including Binance and Coinbase. The two crypto exchanges faced charges of repeatedly violating securities laws by offering digital tokens as unregistered securities.
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