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District Judge Analisa Torres has cut the penalty requested by the U.S. Securities and Exchange Commission (SEC) in the case against Ripple Labs over XRP by 94%. The court partially granted the SEC’s motion for remedies against Ripple, imposing a $125 million civil penalty. “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,” said Ripple CEO Brad Garlinghouse.
‘A Victory for Ripple, the Industry, and the Rule of Law’
On Wednesday, Judge Analisa Torres of the U.S. District Court for the Southern District of New York ruled on the U.S. Securities and Exchange Commission (SEC)’s motion for remedies and final judgment against Ripple Labs. The SEC initiated a lawsuit against Ripple Labs in December 2020, accusing the company of conducting unregistered securities offerings through its sale of XRP tokens. Judge Torres delivered a landmark ruling regarding XRP in July last year.
The judge ruled on Wednesday:
The SEC’s motion for remedies and the entry of final judgment is granted in part and denied in part. Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150.
The SEC’s motion requested a final judgment that included three key remedies: a permanent injunction preventing Ripple from further violations of Section 5 of the Securities Act, disgorgement of $876,308,712 along with $198,150,940 in prejudgment interest, and a civil penalty equivalent to the disgorgement amount. Ripple opposed these demands, arguing that an injunction and such a high disgorgement were unwarranted, and that any civil penalty should be significantly lower, not exceeding $10 million.
Ripple’s chief legal officer, Stuart Alderoty, commented on social media platform X on Wednesday: “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.”
Brad Garlinghouse, Ripple’s CEO, noted that the judge reduced the SEC’s requested penalty by 94%, down from nearly $2 billion. “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,” the executive shared on X, adding:
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.
What do you think about the court’s ruling on Ripple’s case and the penalty imposed? Let us know in the comments section below.