Ripple scored a partial win against the SEC as the U.S. justice system denied all the SEC’s claims. So, it looks like brighter skies ahead for XRP.
Ripple has been ordered to pay a $125 million fine as part of the ongoing legal lawsuit between the cryptocurrency firm and the U.S. Securities and Exchange Commission (SEC), a new court ruling reveals.
“The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150,” the filing wrote.
The SEC’s Case Got Stuffed!
The fine amount is considerably lower compared to the SEC’s original request for $2 billion, including $876 million in disgorgement, $200 million in prejudgment interest, and additional penalties.
Judge Analisa Torres, who is in charge of overseeing the case, however, did not fully side with the SEC in its case against Ripple.
In a written order dated August 7, Judge Torres denied the SEC’s request for disgorgement and prejudgment interest, citing that the SEC’s evidence of institutional investor harm is “speculative.”
The SEC previously used the Ahmed case, in which the SEC had been granted disgorgement, to support its claims against Ripple. The new ruling, however, dismissed it. Judge Torres determined that unlike the Ahmed case, the Ripple case lacks an equivalent level of concrete harm.
The filing also reiterated that while Ripple’s institutional sales of XRP, its native token, constituted unregistered securities offerings, the sales of XRP on public exchanges did not violate securities laws.
In addition to the fine, Ripple has been ordered to stop future violations of securities laws.
Despite the fine being considered higher than Ripple’s proposed $10 million, Ripple CEO Brad Garlinghouse said the court decision was a victory for the company, the industry, and the rule of law.
Long Live Brad
In a recent post on X (formerly Twitter), Garlinghouse stated that the fine reflected how the SEC “had overplayed their hand.” Ripple CEO believes the ruling provides clarity for Ripple to continue its growth and operations; it also marks a positive outcome for the company and the industry.
Many crypto community members and industry figures have celebrated the recent court ruling. Bloomberg Intelligence analyst James Seyffart described the ruling as a loss for the SEC’s approach of “regulation via enforcement.”
He agreed with Garlinghouse that the court’s decision to reduce the penalty showed that the SEC’s aggressive stance may not be as effective as previously thought.
The price of Ripple surged over 25% to $0.63 briefly after the court ruling surfaced, CoinGecko’s data shows. At press time, XRP is changing hands at around $0.61. However, the cryptocurrency is still down around 80% from its all-time high, established in 2018.
In response to the court ruling, the SEC maintains that the securities laws apply to investment contracts, regardless of the technology used. While the SEC-Ripple case likely came to an end, the legal battles between the securities regulator and other major cryptocurrency firms are still ongoing.
The SEC has ramped up its enforcement actions against a number of crypto firms like Coinbase, Binance, Kraken, Consensys, and Uniswap Labs. The common point in these cases is the SEC’s allegation that the entities offered crypto securities without registration.
However, unlike Ripple’s case, the SEC said that Coinbase operated as an unregistered exchange, broker, and clearing agency. The SEC also claimed that Coinbase’s staking program and the trading of certain crypto assets violated federal securities laws.
Similar to Coinbase, Binance faced SEC scrutiny for allegedly operating without proper registration and for offering unregistered securities.
According to an updated filing, the SEC is seeking an amendment in its lawsuit against Binance, which involves redefining certain cryptocurrency tokens. That raises speculations that the agency may no longer want to label the listed tokens as securities.
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