Ripple Labs has been ordered to pay a $125 million fine after a federal judge ruled in favor of the Securities and Exchange Commission (SEC), which accused Ripple of violating US securities laws.
Judge Analisa Torres of the US District Court for the Southern District of New York ruled on August 7 that Ripple must pay the amount to the SEC within 30 days.
The court’s analysis, based on Ripple’s expert report, found that “1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150.” The SEC initially asked for a maximum penalty of $2 billion, whereas Ripple suggested a $10 million cap.
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The ruling also includes an injunction preventing Ripple from future securities law violations. Judge Torres noted that while Ripple’s recent sales might not have broken federal law, there is a reasonable chance of future violations, explaining:
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.
Ripple’s CEO, Brad Garlinghouse, called the decision a “victory for Ripple, the industry, and the rule of law,” pointing out that the court reduced the SEC’s proposed penalty by around 94%. “The SEC’s headwinds against the whole of the XRP community are gone,” he added.
Chief Legal Officer Stuart Alderoty also commented on the ruling on X.
This ruling marks the end of Ripple’s legal battle with the SEC, which began in December 2020 when the SEC accused Ripple of raising funds through the sale of unregistered securities. In July 2023, Judge Torres ruled that XRP tokens were not securities when it came to programmatic sales on digital asset trading platforms.
Initially, the SEC’s lawsuit also targeted Garlinghouse and Ripple executive chair Chris Larsen, but the commission decided to drop all claims against them in October 2023.
The latest ruling not only impacts Ripple but also sets a precedent within the crypto industry regarding compliance with US securities laws.
Gode is a Web3 Market Analyst who researches the most important industry events and interprets how they affect the wider Web3 space. Her formal education in media culture & digital rhetoric allows her to employ a methodical approach to evaluating critical Web3 news data, including large-scale events and the wider social sentiment within the ecosystem.
Gode is a mutilingual professional, having studied in multiple universities all across Europe. This allows her to have a one-of-a-kind opportunity to analyze Web3 social sentiments spanning different cultures and languages and, in turn, develop a much deeper understanding of how the Web3 space is growing within different communities. With the rest of her team, Gode works to identify crucial crypto news patterns and provide unbiased and data-driven information.
Gode’s passions include working and communicating with people, and when she’s not researching Web3 news, she spends her time traveling and watching true crime documentaries.
