What's Next in the Ripple-SEC Lawsuit?
In a setback to the U.S. Securities and Exchange Commission (SEC), a federal judge on Wednesday ordered Ripple Labs to pay a little over $125 million civil penalty in its ongoing legal battle with the regulator.The SEC initially sought a nearly $2 billion penalty, while Ripple pushed for the fine to be capped at $10 million.
The price of XRP (XRPUSD), which Ripple uses in various products and services, spiked nearly 30% from the day's low to a high of 64 cents in the hours after the fine was revealed. Trading of XRP had intensified in recent months, especially in South Korea, due to the expectation of a conclusion of the SEC's case against Ripple.
But what does this mean for Ripple's business and is it the end of the legal tussle?
This decision comes years after the SEC first filed its complaint against Ripple in December 2020. Ripple secured a partial victory in July 2023, with the court ruling that only institutional sales of the XRP token, not programmatic sales to retail investors, were unregistered securities offerings. The $125 million penalty relates specifically to these institutional sales, with 1,278 transactions found to have violated Section 5 of the Securities Act of 1933.
In the latest ruling, Judge Analisa Torres also directed Ripple to cease any further violations of securities laws. Additionally, the court clarified this injunction applies to Ripple's On-Demand Liquidity service. However, Torres rejected the SEC's request for disgorgement and prejudgment interest, stating that the agency failed to show «pecuniary harm» justifying such penalties.
«This is a victory for Ripple, the industry and the rule of law,» Ripple CEO Brad Garlinghouse posted on X.«The SEC’s headwinds against the whole of the XRP
Read more on investopedia.com
