The US SEC targeted Ripple’s new project, the stablecoin, in its latest lawsuit against the company. The SEC described the token planned by Ripple as an “unregistered crypto asset” in a redacted resolution response brief dated May 7. Moreover, the SEC asked the court for an injunction against Ripple.
SEC asked the court for an injunction for Ripple
It is noteworthy that the regulatory body did not explicitly mention a “stablecoin” in its application. Instead, the SEC cited Ripple’s April 4 press release announcing the stablecoin issuance. cryptokoin.comAs you follow from , the company announced its intention to launch a stablecoin in April. However, it has not provided further details about the token since then.
Additionally, the SEC is requesting that the court issue an injunction. The SEC argues that this proposed stablecoin is further evidence that Ripple will continue to engage in unregulated activities unless a permanent injunction is granted. In this context, the Securities and Exchange Commission includes the following statements in the document:
Courts readily grant injunctions in these types of cases because they are more likely to occur again. Ripple is also planning to launch a new unregistered crypto asset. See April 4, 2024 Press Release (Ex. 1). And the Court has already found that Ripple’s ODL Institutional Sales through 2020 violated the law.
Ripple’s XRP sales through the SEC lens
The SEC says Ripple’s primary business is the unregistered institutional sale of XRP. He also insists he will continue to do so barring an injunction. In this regard, the SEC makes the following statement:
Ripple’s ongoing business places it in a position where ‘breaches can be foreseen.’ (…) Ripple’s primary business continues to be the unregistered sale of XRP, as it has been since 2013.
SEC proposes $2 billion fine
The SEC also wants the Court to impose a heavy penalty on Ripple to deter the company and other imitators. In this regard, the regulatory body is demanding a fine of almost $2 billion from Ripple. However, the crypto firm claims that the Court should reject this request. Ripple is proposing a civil penalty not to exceed $10 million. Meanwhile, the company has sold over $100 million worth of XRP monthly for years. So, according to the SEC, the selling each month is more than 10 times the total penalty proposed by Ripple for its 11 years of operation.
Ripple chief legal officer Stuart Alderoty argues that the SEC’s filing is unfounded. He says this is another example of the regulator’s failure to enforce the law. Alderoty also notes that the SEC has ignored crypto frameworks in other jurisdictions.
The regulator also disagreed with Ripple’s assurance that it would not violate US securities law because it has licenses in other jurisdictions. Interestingly, the SEC’s lawyer wrote:
This argument is ridiculous, like saying a restaurant in New York doesn’t need a liquor license because it has a fishing license in California.
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