August 8, 2024
In a landmark ruling ending a three-year legal battle, US District Judge Analisa Torres ordered Ripple Labs to pay a $125 million penalty** for violating securities laws—a **94% reduction** from the **$2 billion initially sought by the Securities and Exchange Commission (SEC). Following the verdict, XRP’s price surged 21% to $0.62.
Key Ruling Details
- Violation Confirmed: Ripple’s 1,278 institutional sales of XRP were deemed unregistered securities offerings.
- Retail Sales Upheld: The court reaffirmed that exchange sales to retail investors complied with regulations.
- Injunction Issued: Ripple is barred from future securities law violations and must file registration statements before selling securities.
SEC’s Original Demand vs. Court’s Decision
| SEC Request | Court’s Final Penalty | Reduction |
|---------------------------|-----------------------|-----------|
| $1.982B** (Pre-judgment interest) | **$125M | 94% |
| $876.3M (Civil penalty) | | |
| $876.3M (Disgorgement) | | |
Ripple’s Response
CEO Brad Garlinghouse hailed the decision as a "victory for the crypto industry", emphasizing that the SEC’s "overreach was curtailed":
"The SEC asked for $2B, and the Court reduced their demand by ~94%... This is a victory for Ripple, the industry, and the rule of law."
— @bgarlinghouse
Market Impact
👉 XRP’s price rally reflects investor optimism post-ruling, with trading volumes spiking 300% on major exchanges.
FAQs
1. Can the SEC appeal this decision?
Yes, though previous attempts to challenge the retail-sales ruling were denied.
2. What happens next for Ripple?
The company must comply with the injunction and submit registration documents for future institutional sales.
3. How does this affect other crypto lawsuits?
The ruling sets a precedent for distinguishing between institutional vs. retail crypto sales under US securities law.
Conclusion
This verdict delivers regulatory clarity for Ripple and the broader crypto market, though the SEC may pursue further appeals.
👉 Explore XRP trading strategies to capitalize on post-ruling volatility.
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