Investing.com-- The U.S. Securities and Exchange Commission is seeking fines of about $2 billion from Ripple Labs over its allegedly unlawful sales of the cryptocurrency XRP, the firm’s chief legal officer said on Monday.
Stuart Alderoty, chief legal officer at Ripple, said in a series of social media posts that the SEC had asked District Judge Analisa Torres in Manhattan for the fines in confidential court papers filed on Monday. The commission is scheduled to file the documents publicly on Tuesday, with redactions.
XRP curbed a bulk of its intraday gains after the news, and was last trading up 1.3% at $0.64079.
The payout, if passed, could be potentially one of the biggest fines slapped against a crypto firm. It comes after Torres ruled in July that Ripple Labs’ sales of XRP worth nearly $730 million to hedge funds and sophisticated investors were unlawful sales of unregistered securities.
Ripple is set to appeal the decision in April.
The SEC has been engaged in a legal battle with Ripple since 2020, when the regulator sued CEO Brad Garlinghouse and co-founder Chris Larsen over allegations of raising more than $1.3 billion in illegal sales of unregistered securities.
Torres had ruled that Ripple’s sales of XRP on public exchanges did not amount to sales of unregistered securities.
The SEC-Ripple case is a key point of focus for the crypto industry, given that its overall outcome could potentially dictate the nature of crypto tokens and their regulation.
The SEC has long argued that crypto tokens are securities and should be governed under securities law. But crypto proponents have argued that securities laws are incapable of addressing digital assets, and have called for new, dedicated regulation.
Some proponents have also argued that cryptocurrencies are digital commodities and as such, should be governed by the Commodity Futures Trading Commission.