The U.S. Securities and Exchange Commission (SEC) is demanding US$2 billion in fines from Ripple Labs Inc.

The request is part of a lawsuit initiated in December 2020, which has become a focal point in the debate over digital asset classification and regulation.

Ripple’s top executives have publicly decried the SEC’s move as excessively punitive and based on misleading arguments.

The SEC’s lawsuit against Ripple stems from claims that the company raised US$1.3 billion through unregistered securities offerings linked to its XRP token sales.

In an earlier ruling, Judge Analisa Torres determined that public XRP sales did not violate securities laws while direct sales to institutional investors did.

Ripple is set to file a response to the SEC’s recent filings next month.