The U.S. Securities and Exchange Commission (SEC) is planning to ask a New York judge to levy $2 billion in fines and penalties on Ripple Labs, the crypto firm's CEO and chief legal officer said Monday.
"The SEC plans to ask the Judge for $2B in a case that involved no allegations (let alone findings) of fraud or recklessness. There is absolutely no precedent for this," Ripple CEO Brad Garlinghouse said in a post on X, formerly Twitter.
The SEC's motion for judgment and remedies, filed Friday, remains confidential to outside parties. But Ripple's chief legal officer Stuart Alderoty said the redacted versions of the documents will be made public by March 26.
"As you will see when the SEC's brief is made public tomorrow, they ask the Judge for $2B in fines and penalties," Alderoty said in a post on X.
The Ripple executive came down hard on the SEC, alleging that the securities regulator, rather than adhering to the laws, aims to punish and bully not only the company but also the entire industry.
"...As we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized and designed to mislead. They stayed true to form here," he added.
Garlinghouse also criticized the regulator, saying, "We will continue to expose the SEC for what they are when we respond to this."
Alderoty stated that Ripple will file its response next month.
The latest development comes after a New York judge ordered the Ripple, a payment protocol and exchange network, to share its financial statements with the regulator. The SEC, in its motion filed in January, said the statements were necessary to allow the court to determine appropriate penalties for the crypto network's violations in its sales of XRP tokens to institutional investors.
The legal battle between the SEC and Ripple Labs started in December 2020 when the financial regulator sued the crypto firm and its executives, alleging that they violated federal securities laws by selling unregistered securities in the U.S.
Ripple isn't the only crypto firm that the SEC has brought to court. It also filed a fraud lawsuit against Binance, the world's largest centralized crypto exchange by trading volume. The exchange has formally requested to dismiss the lawsuit, which is considered the most significant hurdle that Binance faces in the United States.
The SEC also filed a lawsuit against Coinbase, another huge crypto exchange platform, accusing the exchange of providing crypto trading and staking services without registering with the regulator.
