The US Securities and Exchange Commission (SEC) has signaled it will not appeal Wednesday’s ruling by Judge Torres in the legal battle with Ripple. The case concluded on August 7 with the company facing a civil penalty significantly less than the SEC originally demanded.
Judge Torres’s decision mandated a $125 million civil penalty for securities violations related to sales to institutions, along with a disgorgement of $0. This is a stark contrast to the approximately $2 billion in damages initially sought by the SEC. Additionally, an injunction was imposed to prevent further violations of Section 5 of the Securities Act.
SEC Breaks Silence On Ripple Ruling
While Ripple’s executives immediately commented on the ruling via X, celebrating the ruling as a victory, the US agency remained silent. However, FOX Business journalist Eleanor Terrett reached out to the SEC on Thursday and obtained a statement which could indicate major news for Ripple.
The SEC said: “The Court granted the SEC’s motion for remedies including an injunction barring Ripple from committing additional violations of the securities laws and significant civil monetary penalties totaling more than 12 times the amount Ripple suggested was appropriate. As the Court found, the fact that Ripple has shown a ‘willingness to push the boundaries of the [Court’s summary judgment] Order evinces a likelihood that it will eventually (if it has not already) cross the line.’”
Furthermore, the US agency expressed its satisfaction that the court also recognized “the egregiousness of Ripple’s conduct” and acknowledged that “there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense.” The SEC spokeswoman continued, “As court after court has stated, the securities laws apply when firms offer and sell investment contracts, regardless of the technology or labels that they use.”
No Appeal?
Thus, both parties seem to perceive the outcome as favorable. Ripple celebrates the drastic reduction in fines, while the SEC highlights the court’s support for its interpretation of securities laws and the penalties imposed.
Based on this, Terrett speculated, “I feel an appeal of the remedies ruling from either side is unlikely. I think it’s more likely that the SEC would appeal the July 2023 ruling now that final judgment has been reached. But I say that while wearing my ‘I’m not a lawyer’ t-shirt.”
Pro-XRP lawyer Fred Rispoli agreed with Terrett’s assessment and commented via X, “This language from both sides is exactly what you typically see from parties that are content with the ruling and do not want to appeal.”
Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty expressed clear satisfaction with the ruling on Wednesday. Garlinghouse emphasized the court’s rejection of the SEC’s hefty demands, celebrating the outcome as a “victory for Ripple, the industry, and the rule of law.” Alderoty highlighted the absence of fraud or financial harm allegations in the case, appreciating the court’s rejection of the SEC’s “absurd” financial demands.
At press time, XRP traded at $0.6046.
Featured image created with DALL.E, chart from TradingView.com
