In a major development in the long-running legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), a federal judge has ordered Ripple to pay a $125 million civil penalty. This fine is a fraction of the $2 billion the SEC had been seeking in disgorgement, prejudgment interest, and civil penalties.
The ruling, issued by Judge Analisa Torres of the Southern District of New York, also imposes an injunction prohibiting Ripple from future violations of securities laws. The injunction requires Ripple to file a registration statement if it intends to sell any securities.
Judge Torres’ decision comes after she ruled in July 2023 that Ripple’s direct sales of its native cryptocurrency XRP to institutional investors violated securities regulations. However, she found that Ripple’s programmatic sales of XRP to retail clients through exchanges did not constitute a violation.
The SEC had previously attempted to appeal the ruling concerning retail sales while the case was ongoing but was unsuccessful. The SEC is now expected to appeal the July 2023 ruling now that the judge has imposed penalties.
Despite the fine, the ruling is seen as a net win for Ripple, as the $125 million penalty is significantly lower than the SEC’s demands. Following the judgment, XRP’s price surged by 23%, reaching as high as $0.6434.
