Ripple is facing a substantial legal challenge as the U.S. Securities and Exchange Commission (SEC) seeks $2 billion in fines and penalties against the company.
Ripple Labs CEO Brad Garlinghouse recently published a post on social media, saying that the SEC intends to ask the Judge for $2 billion in a lawsuit “that involved no allegations (let alone findings)” of fraud or reckless behavior.
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. We will continue to expose the SEC for what they are when we respond to this. pic.twitter.com/LdMQFQm70j
— Brad Garlinghouse (@bgarlinghouse) March 25, 2024
SEC to Ask $2 Billion in Fines and Penalties from Ripple
Stuart Alderoty, Chief Legal Officer at Ripple, also confirmed in another post that the SEC’s brief will be made public on Tuesday, detailing the fine request.
“Our response will be filed next month,” said Alderoty. “But 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.”
Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large. 3/4
— Stuart Alderoty (@s_alderoty) March 25, 2024
“Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large,” added Alderoty.
Alderoty believed that the Court will handle the remedies phase with fairness. Garlinghouse also replied to Alderoty’s post, heavily criticizing the Commission’s Chair Gary Gensler for the wrongdoings.
“Gensler’s SEC has repeatedly acted outside the law – not going unnoticed by Judges admonishing the agency for a “gross abuse of the power entrusted to it by Congress” (DEBT Box case) and for acting without “faithful allegiance to the law” (Ripple case),” stated Garlinghouse.
“Let’s not also forget Gensler’s lack of attention to SBFraud,” Garlinghouse concluded.
Coinbase Sues SEC, Other Industry Players Show Support
On March 11, Coinbase filed a lawsuit against the SEC, seeking a court directive for the regulatory authority to establish clear guidelines for the crypto industry.
Coinbase’s filing faulted the SEC for its lackluster approach to regulation, contending that the lack of clear guidelines has forced the industry to operate in a regulatory ambiguity.
“For years the SEC indicated that it had little statutory authority over digital assets and that what authority it did have was unclear,” stated Coinbase. “Market participants responded by investing heavily in a now two-trillion-dollar industry and built their businesses in compliance with relevant agencies’ regulatory frameworks.”
Entities like Paradigm and the Crypto Council for Innovation have since supported the lawsuit against the SEC, submitting amicus briefs to the circuit court to advocate for the agency to adopt more specific regulations.
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