Summary:
- Ruling: Judge Analisa Torres has ordered Ripple Labs to pay $125 million in civil penalties and banned the company from future violations of securities laws.
- SEC Case: This ruling marks the potential end of the SEC’s case against Ripple Labs, which began in November 2020.
- Fine Details: The fine is significantly lower than the $2 billion initially requested by the SEC.
- Market Reaction: XRP surged by more than 20% following the announcement.
- Historical Ruling: In July 2023, Judge Torres ruled that XRP’s sale to institutions violated securities laws but was legal when sold to the public on crypto exchanges.
In a court filing on Wednesday, Judge Analisa Torres ruled that Ripple Labs would pay a $125 million civil penalty and banned the company from future violations of securities laws. This decision comes after a lengthy legal battle with the Securities & Exchange Commission (SEC), which began in November 2020. The SEC had accused Ripple of conducting unregistered securities sales, raising $1.3 billion through the sale of XRP tokens.
The 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.”
Initially, the SEC requested a $2 billion fine, but Ripple argued for a lower amount, around $10 million. The fine Judge Torres settled on is far less than the $1 billion in disgorgement and prejudgment interest and $900 million in civil penalties the SEC sought.
In July 2023, Judge Torres found that XRP’s programmatic sales to retail clients through centralized exchanges did not violate securities laws. However, she ruled that Ripple violated securities regulations through its direct sale of XRP to institutional clients. This dual ruling clarified the legality of XRP’s different sales channels and set the stage for the final judgment.
XRP investors viewed this ruling as a positive development for Ripple and the cryptocurrency. The price of XRP surged by more than 20% immediately after the news broke, demonstrating renewed confidence in the asset.
Ripple (XRP) also made a comeback above key support at $0.50 after the recent correction in the crypto market. On-chain data shows that traders had been losing interest in the altcoin after a massive sell-off event on August 5. However, the news of the court’s decision has reignited interest and optimism among investors.
This ruling marks a significant milestone in the regulatory landscape for cryptocurrencies and could have far-reaching implications for the industry. As Ripple complies with the court’s orders, the company aims to move forward and continue its operations within the regulatory framework.
Ripple’s case with the SEC has been closely watched by the crypto community, and this resolution brings a sense of closure and clarity to the legal status of XRP. Moving forward, Ripple and its investors can focus on the future, armed with a clearer understanding of the regulatory environment.
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