Ripple was fined $125 million for institutional sales, but crypto exchange transactions were deemed legal.
You can see the court document here.
Judge Torres has ruled that Ripple shall pay $125M in civil penalties and stop any further violations of securities laws, putting an end to the nearly four-year legal battle it fought with the SEC.
The SEC had initially requested a penalty of $2B from Ripple.
Alongside the financial penalty, Judge Torres issued an injunction prohibiting Ripple from future violations of federal securities laws. She emphasized that while there was no judgement on Ripple having violated any laws post the SEC’s lawsuit, there is a substantial risk that the company might “cross the line” in the future.
“Rather, the Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line,” Judge Torres stated. “On balance, the Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction.”
The injunction mandates that Ripple must file a registration statement if it plans to sell any securities in the future.
The SEC is expected to appeal the July 2023 ruling now that the sentence has been imposed. This follows the denial of the SEC’s motion for an interlocutory appeal last year by the same judge.
Additionally, the SEC and Ripple reached a settlement regarding charges against CEO Brad Garlinghouse and other executives following the denial of the interlocutory appeal.
Fox Business correspondent Eleanor Terrett says:
I may be being a little too optimistic by saying “putting an end” to the case because I guess you can never rule out an appeal with this SEC, but the ruling marks the end of the Ripple case at the district court level.
Ripple CEO Brad Garlinghouse says:
The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company. This is a victory for Ripple, the industry and the rule of law. The SEC’s headwinds against the whole of the XRP community are gone.
Ripple Chief Legal Officer Stuart Alderoty says:
A final judgment. The Court rejects the SEC’s suggestion that Ripple acted recklessly and she reminds the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm. She rejects the SEC’s absurd demand for $2B in fines and penalties. We respect the $125M fine the Court has imposed for certain historic sales to sophisticated third parties.
