Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty have revealed that the SEC is seeking a staggering $2 billion in fines and penalties.

According to the company’s executives, the fines have been proposed in a court filing that will be unsealed on March 26.

‘Unhinged’ SEC

Garlinghouse said the SEC is seeking heavy penalties despite its claims involving “no allegations … of fraud or recklessness.” He added that there is “absolutely no precedent” for the request and asserted that Ripple’s response will “expose” the SEC.

In another tweet, Garlinghouse condemned the SEC by referencing an earlier decision that found the SEC lacked “faithful allegiance to the law” in its treatment of Ripple.

Chris Larsen, co-founder and executive chairman of Ripple, also commented, writing:

“Gensler’s SEC has become unhinged.”

Larsen added that the watchdog “thinks it’s above the law” and argued that this mentality has caused the US to lag behind other nations. He emphasized that the regulator’s failings “should not … go unnoticed in an election year.”

A Republican victory in this year’s US elections could lead to the SEC being restructured, possibly replacing current SEC chair Gary Gensler.

Meanwhile, Alderoty separately asserted the SEC is “bent on wanting to punish and intimidate Ripple.” He added that the regulator “trades in statements that are false, mischaracterized, and designed to mislead.”

Institutional sales

Earlier rumors suggested that Ripple could face a fine above $2 billion based on institutional sales of XRP, as past rulings only found that these offerings constituted securities sales.

On Feb. 26, Ashley Prosper identified 4.9 billion XRP of institutional sales in a court filing, leading to widespread predictions of $2.6 billion in fines based on a $0.55 token price.

However, as of March 25, XRP is priced somewhat higher at $0.66, putting the value of the same 4.9 billion XRP at $3.2 billion. This means that the SEC’s intended fine is either not based on the current XRP price or is less than the total institutional sale amount.

Programmatic sales of XRP, including on-exchange sales, did not constitute securities. The SEC also dropped allegations that Garlinghouse and Larsen’s personal XRP sales were securities. As such, those sale amounts likely did not contribute to the SEC’s currently requested fine.