The multi-year court case between Ripple and the SEC may be drawing closer to a conclusion, with the SEC requesting Ripple pay USD $2B in fines.
Ripple’s CEO suggested that such an absurdly high figure was unprecedented, and that his company was being made an example out of.
The crypto community echoed this sentiment, with many believing the SEC were trying to send a message to the industry.
It’s almost unfathomable to think this saga began nearly four years ago, in December 2020, when the Securities and Exchange Commission officially sued Ripple. The lengthy legal battle that ensued has been an up-and-down affair, with many positives for the crypto industry – but many setbacks, too.
Related: SEC’s Billion-Dollar Fraud Trial Commences, As Do Kwon Leaves Prison
While a judge ruling that XRP by itself was not a security was a landmark moment for the Ripple team, it was only one win in a best-of-seven series. And according to Ripple CEO Brad Garlinghouse, the final result is looking a little expensive.
In his tweet, Garlinghouse mentioned that the SEC was requesting the judge hand down a $2B (AUD $3.06B) fine to Ripple. He noted that this level of fine was unprecedented for any industry – especially considering the allegations of fraud against his company had been tenuous at best.
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
An actual example of fraud, the block.one startup, raised billions of dollars for its initial coin offering (ICO) without actually having a working product. The SEC settled with this company for a hefty, but significantly lesser sum, of USD $24M (AUD $36.69M).
The SEC is already at odds with the crypto industry thanks to its hardline stance on digital assets, while taking on a “regulation-by-enforcement” policy that throttles innovation. So naturally, the reaction to Garlinghouse’s tweet was one of outrage.
🚨@SECGov plans to seek $2B in remedies from @Ripple for $700M in institutional sales of XRP to qualified investors. No fraud nor any harm to those investors was alleged. Just failure to register.
For the retail investors who suffered $15B in losses from the SEC’s failed… https://t.co/BoK3Zxdjkk
— CryptoLaw (@CryptoLawUS) March 25, 2024
Some suggested that the reason for such a high fine was Gary Gensler’s way of sending a message to the crypto industry.
Brad we know the SEC overreaches in crypto cases regardless of the notion of simply applying the law and we know its motives in this case go beyond legal considerations so it won’t obtain anywhere near $2B, but I assume it has made an argument in its brief that there needs to be… https://t.co/muaWxiYjq8
— bill morgan (@Belisarius2020) March 25, 2024
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That’s all well and good in a mafia movie but, Gary – this is real life. Threatening the crypto industry with billion-dollar fines while giving fraudulent players in TradFi slaps on the wrist seems a little unfair, but hey. If it’s to send a message, then it’s totally fine!
(Sorry Gary. Please don’t sue me)
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