A federal court has concluded the landmark legal battle between Ripple Labs and the Securities and Exchange Commission (SEC) with a $125 million penalty against the former.
Federal Court’s Final Ruling
After a four-year legal battle, the Ripple vs. SEC case has finally concluded, with federal judge Annalise Torres imposing a $125 million fine on the crypto firm. In an Aug. 7 filing in the US District Court for the Southern District of New York, Judge Analisa Torres found Ripple liable for $125 million, instead of the SEC’s demands of $2 billion, which it was expected to pay to the SEC within 30 days.
According to court filings, the final ruling stated,
“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.”
Injunction and Future Violations
Judge Torres has also prohibited Ripple from future violations of US securities laws. While Ripple’s sales post-SEC complaint may not have violated federal law, Judge Torres noted,
“The Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line.”
This injunction reflects concerns about potential future infractions by Ripple.
Background and Legal Context
The ruling follows a July 2023 decision by Judge Torres, which found that Ripple’s sale of XRP to institutions violated securities laws, but sales to the public via crypto exchanges did not. This distinction was pivotal in shaping the final judgment. The SEC had initially sought a $2 billion penalty, whereas Ripple advocated for a significantly lower amount of around $10 million.
Case Timeline
The four-year-long case against Ripple began in November 2020, accusing the company of raising $1.3 billion through unregistered securities sales via XRP tokens. The recent ruling marks a critical juncture in this prolonged legal conflict. Judge Torres’ decision provides a degree of closure, clarifying the legal status of XRP in specific contexts and establishing Ripple’s financial obligations.
Ripple’s Response and Market Impact
Ripple’s CEO, Brad Garlinghouse, framed the ruling as a victory for the company, the cryptocurrency industry, and the rule of law.
In an August 7 post on social media platform X, Garlinghouse stated,
“We respect the Court’s decision and have clarity to continue growing our company. The SEC’s headwinds against the whole of the XRP community are gone.”
Chief legal officer Stuart Alderoty also confirmed the company’s intent to comply with the $125 million fine.
Following the announcement, XRP’s price surged by approximately 24%, rising from $0.50 to $0.62. This market reaction underscores the significance of the court’s decision for Ripple and its stakeholders.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
