Filing: the US SEC told a judge that Ripple should pay $2B+ in fines and penalties for selling more of its XRP token since being sued by the regulator, and more
The regulator is slated to release a public brief on Tuesday, Stuart Alderoty, Ripple's chief legal officer, said in a separate post on X on Monday.
BloombergChris Dolmetsch
Context & Ripple Effects
The penalty request follows a split procedural record: the SEC had signaled an appeal of the ruling on XRP sales through retail exchanges, while it later dropped its claims against Ripple’s two top executives. The dispute therefore centers increasingly on Ripple’s conduct and remedies rather than individual liability.
The filing puts a concrete monetary remedy behind that enforcement campaign. It also foreshadows the later $125M institutional-sales penalty, which came in far below the amount the SEC sought.
First-order effects
Ripple faces a proposed liability of more than $2 billion, raising the immediate financial and legal stakes of its XRP-sales case.
The SEC’s public brief will set out its remedy theory, giving Ripple a defined claim to contest before the judge decides on penalties and other relief.
Second-order effects
The size of the request makes the distinction between institutional XRP sales and retail exchange sales more consequential for how crypto issuers assess enforcement exposure; the SEC had already pursued an appeal over the retail-sales ruling.
A large proposed remedy increases pressure on Ripple to devote management attention and resources to litigation, even though the eventual court-imposed penalty may differ sharply from the regulator’s request.
Third-order effects
If courts continue to separate transaction types when applying securities rules to tokens, crypto compliance will be shaped as much by distribution method and buyer category as by a token’s label.
The case illustrates a regulatory-moat dynamic: firms with the resources to sustain lengthy enforcement disputes may be better positioned to navigate uncertain token-sale rules than smaller issuers.
The trend: Crypto enforcement is moving from threshold questions about whether token transactions are securities toward remedies, sale-channel distinctions, and the cost of compliance under unsettled law.
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. [image]
Gensler's SEC has repeatedly acted outside the law - not going unnoticed by Judges admonishing the agency for a “gross abuse of the power entrusted to it by Congress” (DEBT Box case) and for acting without “faithful allegiance to the law” (Ripple case). Let's not also forget...
Gensler's SEC has become unhinged. This will not, and should not, go unnoticed in an election year, as the SEC singlehandedly thinks it's above the law, dragging the US further behind other G20 countries.
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. 2/4
I hope the SEC nails Garlinghouse & crew for the full $2B for their direct sales of XRP (not the stuff on exchanges), they lied their assess off about Ripple and deserve to lose every dollar even if the SEC was completely wrong is saying exchange sales were securities
Chris Larsen's Ripple illegally sold over $729M in unregistered securities to investors, then continued doing so after being noticed of its illegality. He's a scofflaw. The SEC is now seeking $2B in damages in punitive damages. Gensler is enforcing the law to protect consumers.
Larsen sold over $729M in unregistered securities to investors even after being advised by his own counsel that “if sold to investors, XRP tokens are likely to be securities.” The SEC isn't operating outside the boundaries of well-settled law. Larsen's own counsel agreed in 2012 …