On August 7, 2024, Ripple Labs was ordered to pay a $125 million civil penalty by a federal judge. This ruling, issued by Judge Analisa Torres of the U.S. District Court for the Southern District of New York, concludes a legal battle that began in December 2020. The Securities and Exchange Commission (SEC) claimed Ripple violated securities laws by selling XRP tokens without registering them.
Judge Torres’ decision is a compromise between Ripple’s request for a $10 million fine and the SEC’s demand for $2 billion. Ripple must pay the $125 million within 30 days. Along with the fine, Ripple faces an injunction that will prevent it from violating securities laws in the future.
Impact of Previous Rulings
This ruling follows a key decision made by Judge Torres in July 2023. At that time, she ruled that Ripple’s XRP sales on exchanges did not break any securities laws. This earlier decision played a major role in the current ruling.
While Ripple was found to have broken securities laws, the court did not find any fraud or theft. Additionally, the SEC could not show that Ripple’s sales caused major losses for investors. The new ruling requires Ripple to comply with stricter regulations. If Ripple plans to sell any securities in the future, it must file a registration statement first.
Market Reaction
The ruling had a notable effect on XRP’s price. After the announcement, XRP’s value went up by 22%, reaching $0.6238. This is a significant increase from a recent low of $0.4315. This jump in price shows that the market reacted positively to the resolution of Ripple’s legal troubles.
Ripple can pay the fine electronically or by certified check. The SEC will manage the funds and hold them, along with any interest, until they receive court approval to distribute them.
There could be more legal challenges ahead. The SEC might appeal the decision about Ripple’s retail sales, which could prolong the legal battle for Ripple Labs.
This decision is a major moment for Ripple Labs, combining a large financial penalty with new rules to ensure they follow the law in the future.
