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The U.S. Securities and Exchange Commission (SEC) has approached a judge in New York, seeking to impose a penalty close to $2 billion on Ripple Labs.
Stuart Alderoty, the Chief Legal Officer at Ripple Labs, announced via social media that the SEC has proposed such a substantial fine, with the redacted court documents expected to be publicly available by Mar. 26. According to the SEC’s request, it wants Ripple Labs to be ordered to return $876 million in gains, pay $198 million in prejudgment interest, and a $876 million in civil fines, totaling approximately $1.95 billion.
As you will see when the SEC’s brief is made public tomorrow, they ask the Judge for $2B in fines and penalties. 1/4 https://t.co/HM8dBbn7lp
— Stuart Alderoty (@s_alderoty) March 25, 2024
XRP vs the SEC
This legal battle was initiated in December 2020, when the SEC accused Ripple Labs and its two executives of breaching federal securities laws through their sales of XRP to both large-scale investors and the general public. However, in a decision made last July, Judge Analisa Torres of New York determined that while Ripple’s direct sales to institutions were in violation, the distribution of XRP through exchanges and algorithmic processes did not contravene U.S. regulations.
The SEC’s legal filings argue for a strict stance against similar violations within the cryptocurrency industry, urging the court to deliver a clear message against such infractions. Alderoty has voiced criticisms against the SEC’s actions and mentioned that Ripple Labs plans to submit a formal reply to the SEC’s motion in the coming month, with the SEC highlighting that Ripple’s response must be submitted by no later than April 22, 2024.
XRP is not the only token in the SEC’s crosshairs. Early Ethereum (ETH) advisor Steven Nerayoff has recently expressed serious concerns over the investigation of Ethereum by the SEC. He also noted that the prospects of Ethereum exchange-traded funds (ETFs) might be facing more rigorous examination.
The development follows a price prediction suggesting that XRP may soon see a 25% upward swing to regain its previous price of $0.75. The analysis highlighted the coin’s price being near the 200-day moving average support, and potentially triggering further growth towards the $0.92 mark.
Featured image: Canva
