tl;dr
The U.S. Securities and Exchange Commission has criticized Ripple's proposed fine as a "slap on the wrist" that fails to punish or deter wrongdoing. The SEC argues that Ripple's offer of nearly $10 million is inadequate compared to the alleged $1 billion gained from violating securities laws. Ripple...
The U.S. Securities and Exchange Commission has criticized Ripple's proposed fine as a "slap on the wrist" that fails to punish or deter wrongdoing. The SEC argues that Ripple's offer of nearly $10 million is inadequate compared to the alleged $1 billion gained from violating securities laws. Ripple's chief legal officer condemned the SEC's stance, expressing optimism about resolving the lawsuit.
The legal battle stems from the SEC's accusation that Ripple sold unregistered securities in the form of XRP. While Ripple secured a partial court victory, the judge ruled that institutional sales of XRP constituted unregistered securities sales, leading the SEC to seek a $2 billion fine for that violation.
The U.S. Securities and Exchange Commission says that the penalty that Ripple is willing to pay after a long drawn-out legal battle would be a “slap on the wrist that neither punishes nor deters” wrongdoing. The regulator argued in a Tuesday filing that its initial $2 billion demand would be more appropriate than the nearly $10 million fine Ripple proposed last month.
“Given the nearly $1 billion Ripple gained violating Section 5 the multi-billion-dollar business it built selling XRP—accounting for the value of Ripple’s massive XRP holdings and its cash on hand—the ‘low’ penalty Ripple demands would be a ‘slap on the wrist’ that neither punishes nor deters,” the filing said.
“Ripple—whose founders were behind the seventh biggest cryptocurrency XRP —has been locked in a legal battle with the SEC for years. Back in 2020, the regulator hit the fintech company with a $1.3 billion lawsuit, alleging that it sold unregistered securities in the form of XRP. But last year, Ripple scored a partial court win against the SEC when a judge ruled that programmatic sales of XRP to retail investors did not qualify as securities. However, the judge also said that $728 million worth of contracts for institutional sales did constitute unregistered securities sales. The SEC is seeking a $2 billion fine for that violation as a result."
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