Ripple wins again, fined $125 million—far lower than expected
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Ripple wins again, fined $125 million—far lower than expected
The litigation has not completely ended.
Navigating Web3 tides with focused insightsBy: Felix, PANews
The long-running legal battle between Ripple and the U.S. SEC has taken another turn. In a filing submitted on August 7 to the U.S. District Court for the Southern District of New York, Judge Analisa Torres ruled that Ripple must pay over $125 million in disgorgement to the SEC within 30 days. Additionally, the court issued an injunction prohibiting Ripple from further violations of securities laws, requiring the company to file a registration statement if it plans to sell any securities.
Regarding the injunction aimed at preventing future securities law violations by Ripple, Judge Torres stated that while the company’s sales following the SEC’s complaint may not have violated federal law, “the likelihood of future violations is substantial enough to justify an injunction.”
Judge Torres’ ruling represents a mixed outcome for both parties. While the court found that certain XRP sales did constitute unregistered securities offerings, it also concluded that XRP itself is not a security. This marks a “major victory” for Ripple and has sent shockwaves through the cryptocurrency market, sending XRP’s price soaring. According to Coingecko data, XRP surged 19.2% within 24 hours.
"Ripple declares victory"
The penalty amount is far below the $1 billion in ill-gotten gains and prejudgment interest and $900 million in civil penalties originally sought by the SEC. CEO Brad Garlinghouse stated on the X platform that given the court reduced the SEC’s requested penalties by 94%, this decision is “a win for Ripple, the industry, and the rule of law.”
“The SEC asked for $2 billion in damages. The court determined they overreached and cut their request by approximately 94%. We respect the court’s decision and are clear that we will continue building our company. This is a win for Ripple, the industry, and the rule of law. The SEC’s resistance against the entire XRP community has ended.”
Earlier in July, Brad Garlinghouse anticipated that the company would “soon” resolve the multi-year lawsuit with the U.S. SEC. Data from analytics firm Santiment shows that activity levels on the XRP ledger and new address creation have reached their highest levels since March.
Ripple’s Chief Legal Officer Stuart Alderoty said the company will “respect the $125 million penalty.” “Final judgment. The court rejected the SEC’s claim that Ripple acted recklessly and reminded the SEC that this case involves no allegations of fraud or intentional misconduct, and no one suffered financial losses. She dismissed the SEC’s absurd demand for $2 billion in penalties and fines. We respect the court-ordered $125 million penalty.”
The litigation is not entirely over
In 2020, the U.S. SEC accused Ripple of raising $1.3 billion through XRP sales, claiming that XRP was an unregistered security.
In July 2023, the judge ruled that Ripple’s direct sales of XRP to institutional clients violated federal securities laws, but its programmatic sales of XRP to retail investors via exchanges did not violate any securities laws. During the proceedings, the SEC attempted to appeal this portion of the ruling but failed.
With its fourth consecutive win against the SEC, Ripple appears to be emerging from the shadows—but legal uncertainty remains. The SEC still has 60 days to appeal this latest ruling, meaning the legal dispute surrounding XRP could persist. Nevertheless, this victory undoubtedly boosts Ripple’s confidence and could help revitalize the currently sluggish market.
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