The US Securities and Exchange Commission (SEC) is taking aim at Ripple’s proposed stablecoin, according to a recent court filing. In its redacted remedies reply brief on May 7, the SEC labeled the proposed stablecoin as an “unregistered crypto asset,” citing it as evidence that Ripple may continue to engage in unregulated activities without a permanent injunction.
Ripple had announced plans to launch a stablecoin in April but has not shared additional details about the token since then.
The SEC is pushing for a substantial fine against Ripple, arguing that the company’s primary business of unregistered sales of XRP will persist if the injunction is not granted. The regulator also dismissed Ripple’s assurance that it would not violate US securities law due to licenses held in other jurisdictions, likening the argument to a New York restaurant claiming it doesn’t need a liquor license because it has a fishing license in California.
The SEC is seeking fines of almost $2 billion from Ripple, while the crypto firm is proposing a civil penalty not exceeding $10 million.
In response to the SEC’s filing, Ripple’s chief legal officer Stuart Alderoty criticized the regulator’s actions as baseless and accused them of failing to apply the law properly. Alderoty also highlighted the SEC’s lack of respect for crypto frameworks in other jurisdictions, stating that the regulator views these frameworks as equivalent to fishing licenses.
Overall, the SEC’s latest moves indicate a continued regulatory battle between the agency and Ripple over the company’s operations and proposed stablecoin.
