The US Securities and Exchange Commission (SEC) is aggressively pursuing a $2 billion fine against Ripple Labs.
The heart of the matter dates back to 2013 when Ripple allegedly initiated fundraising through the sale of XRP without proper registration.
The SEC’s complaint outlines that Ripple raised funds through these unregistered securities offerings in the US and globally. It claims the firm distributed billions of XRP in exchange for non-financial benefits, such as labor and market-making services. This controversial approach to financing has put Ripple in the regulatory spotlight.
Adding to the gravity of the situation, Ripple executives, including notable figures Larsen and Garlinghouse, are accused of personally profiting to the tune of approximately $600 million from unregistered sales of XRP.
As a result, the SEC is seeking $2 billion in fines and penalties from a New York judge in the ongoing case against the company.
“Our response will be filed next month, 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,” Ripple Chief Legal Officer Stuart Alderoty said.
Read more: Everything You Need To Know About Ripple vs SEC
The SEC’s actions reflect the stringent regulatory environment governing cryptocurrencies and the agency’s commitment to enforcing existing securities laws.