Lee Hepner, senior legal counsel at the American Economic Liberties Project, has opined that Ripple is in a precarious position after the U.S. Securities and Exchange Commission (SEC) filed its motion for roughly $2 billion in penalties and fines against the company.
“Ripple might not be toast yet, but they’re in the toaster,” the legal analyst said.
Hepner described the SEC’s motion as “explosive” since it includes details of how the company’s “reckless disregard for law” persisted even after a federal court found them liable.
The SEC pointed to the fact that Ripple continued illegal offers and sales of unregistered securities to investors even after the SEC filed its lawsuit against the company in December 2020. Moreover, Ripple did not cease these activities even after the court found them liable.
Last year, the court ruled that the San Francisco-based company violated federal securities laws in directly selling the controversial XRP token to institutional investors. At the same time, the ruling stated that secondary sales did not constitute an unregistered offer.
Hepner has opined that the motion is a “compelling and thorough account of Ripple’s misconduct and refusal to take responsibility.”
As reported by U.Today, the SEC has argued that the massive fines and penalties are necessary to deter future violations, compensate harmed investors, and punish Ripple for its illegal sales of XRP. Key factors supporting these remedies include Ripple’s violation history, reckless conduct, and the non-isolated nature of its offenses.
At the same time, Stuart Alderoty, Ripple’s chief lawyer, has slammed the SEC for remaining “bent on wanting to punish and intimidate” his company. Ripple CEO Brad Garlinghouse decried regulatory overreach and recalled the SEC’s recent setbacks in courts. Meanwhile, Ripple co-founder Chris Larsen went as fast as describing the SEC as “unhinged.”
Ripple is expected to file its response to the SEC’s $2 billion request in April.
