beincrypto.com
US federal judge Analisa Torres has ordered Ripple Labs to pay a $125 million penalty for selling its XRP token without proper registration. Despite the hefty fine, Ripple emerged with a much smaller financial burden than the Securities and Exchange Commission (SEC) initially sought, nearly $2 billion.
This decision concludes a long-standing battle with the SEC that has captured the attention of the crypto industry.
CEO and CLO of Ripple React to Landmark Legal Victory
The case began in 2020 when the SEC accused Ripple of raising money through unregistered sales of XRP, claiming the digital token was a security. The agency then filed a lawsuit against Ripple in December 2020. This brought Ripple under a serious legal challenge.
However, Judge Torres’s ruling on August 7 specified that Ripple’s actions did not involve fraud. Consequently, it significantly influenced the final penalty.
The judgment also enjoined Ripple from further violations of the Securities Act, ensuring future compliance with securities laws. Indeed, this ruling has brought some much-needed clarity to the industry regarding the regulatory stance on digital tokens.
Brad Garlinghouse, Ripple’s CEO, showed his respect for the court’s decision by reducing the SEC demand by about 94%. He also expressed his relief that the firm now has the clarity to continue growing its business.
“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,” Garlinghouse stated on his X (Twitter).
Stuart Alderoty, Ripple’s Chief Legal Officer, commented on the court’s decision. He highlighted that the case contained no allegations of fraud or deliberate misconduct, and no financial harm was reported.
“We respect the $125 million fine the Court has imposed for certain historic sales to sophisticated third parties,” Alderoty noted.
Following the court’s decision, XRP’s price experienced a significant surge. It rose from $0.5018 to $0.6373, marking a 27% increase within just one and a half hours. At the time of writing, XRP’s price has stabilized and is currently trading at $0.6171.