Federal regulators are seeking to fine blockchain firm Ripple nearly $2 billion, as revealed by company officials on social media before the release of court documents. Ripple CEO Brad Garlinghouse criticized the Securities and Exchange Commission (SEC) for proposing such a steep penalty without any allegations of fraud or recklessness. The SEC’s plan to ask for $2 billion in a case involving no such findings is unprecedented, according to Garlinghouse, who vowed to expose the regulator in the company’s response next month.
Ripple’s chief legal officer, Stuart Alderoty, also lambasted the SEC on Twitter, accusing the regulator of making false statements designed to mislead. The SEC initially sued Ripple in 2020, alleging that the company conducted an unregistered securities offering tied to its XRP token. Despite the legal battle, a judge ruled last year that only Ripple’s institutional sales of XRP, not retail sales, violated the law—seen as a triumph for the cryptocurrency sector. Ripple also secured a victory when the SEC dropped claims against Garlinghouse and Executive Chairman Chris Larsen for allegedly aiding and abetting securities law violations.
As Ripple faces the hefty fine, the company continues to focus on expanding its payments business within the United States. Currently, the majority of Ripple’s operations are overseas, but Senior Director W. Oliver Segovia announced plans to introduce new product updates powered by money transmitter licenses that cover a significant number of U.S. states. This strategic move signals Ripple’s intention to increase its presence in the U.S. market after several legal victories and ongoing challenges with the SEC.