Ripple Labs and XRPII Fined $700,000
May 7, 2024
By: Thadeus Geodfrey
As bitcoin and other cryptocurrencies balance their prices following a period of decline, a civil enforcement action has been made against a virtual currency business.
Jennifer Shasky Calvery, Director of FinCEN, released a statement to explain the reasoning behind the fine of $700,000 imposed on Ripple Labs and its subsidiary, XRPII.
She stated that Ripple had “willfully violated several requirements of the Bank Secrecy Act.”
She went on further and said that “Virtual currency exchangers must bring products to the market that comply with anti-money laundering laws.”
The issue at hand is that Ripple Labs and XRPII sold XRP (the digital currency operated by the Ripple network, similar to bitcoin but centralized) while it was not licensed as a money service business in 2013.
XRPII did not file suspicious activity reports for several transactions despite the requirement.
Ripple Labs, aside from the XRP currency, has created a network that can aggregate all forms of value, including dollars, bitcoins, and commodities.
It has seen some serious funding and interest from banks for protocol integrations.
While Ripple Labs may be able to weather these waves, smaller digital currency businesses and startups should look towards implementing proper AML and KYC procedures or risk facing the same scrutiny.
