The U.S. Securities and Exchange Commission has requested various forms of relief, including injunctive relief, disgorgement of profits, and civil penalties.
They argue that such actions are necessary to deter Ripple and others from similar violations in the future.
Moreover, this would compensate for the harm caused to investors and the markets. “To deter Ripple and others from additional violations of the securities laws, to deprive Ripple of its ill-gotten gains, and in recognition of the harm caused to the markets, the SEC asks this Court to issue a final judgment providing for the relief set forth above and herein,” the SEC said.
The SEC has outlined several factors supporting the imposition of injunctions and penalties. These include Ripple’s violation history, the reckless nature of their conduct, and the fact that their violations were not isolated incidents. According to the much-feared regulator, these factors collectively justify the need for regulatory action.
The SEC argues for the disgorgement of Ripple’s profits obtained from the illegal sales of XRP. They contend that Ripple should not benefit from its wrongdoing. “Ripple received almost a billion dollars from its illegal sales of XRP via contracts that the Court determined violated Section 5,” the SEC noted.
At the same time, a significant civil penalty against Ripple would serve as a deterrent to both the company and others in the industry.
Ripple’s response
As reported by U.Today, Stuart Alderoty, Ripple’s chief lawyer. Alderoty slammed the SEC for its alleged intent to punish and intimidate Ripple and the cryptocurrency industry.
Ripple CEO Brad Garlinghouse has also condemned what he sees as regulatory overreach. He has pointed to alleged misconduct by the SEC under Gary Gensler’s leadership.
It is worth noting that Ripple plans to file its response in April.
