Ripple To Pay Fine Of $125 Million For Unregistered XRP Sales

Ripple To Pay Fine Of $125 Million For Unregistered XRP Sales

On Wednesday, a New York Court ordered Ripple to pay a fine of $125 million in its case with the US Securities and Exchange Commission (SEC).

The civil penalty imposed on the fintech firm is far less than what the SEC had aimed for in its long-running battle with the crypto giant; it wanted a fine of $2 billion.

The Fine

The fine was ordered by US District Judge Analisa Torres. Court documents showed that 1,278 transactions were considered to be in violation of securities laws by the judge.

This ruling comes in a lawsuit that the SEC had filed against Ripple back in 2020. The Wall Street watchdog had alleged that the company’s sales of its XRP token constituted as sales of unregistered securities.

The founders of Ripple had launched the XRP token. The company has been engaged in a legal battle with the securities regulator for the past few years.

However, last year, the company was awarded a partial win when a judge ruled that the sales of the XRP token to retail investors could not be considered a sale of securities.

However, the judge did add that the sales of the XRP token to institutional investors were indeed the sale of unregistered securities. These were valued at $728 million.

The Impact

This decision had taken the entire crypto industry by storm. The SEC has faced ongoing criticism from the crypto industry as well as politicians for its unfair crackdown against the digital asset industry.

Therefore, the ruling was regarded as a success for the entire digital asset ecosystem. The latest ruling is also being regarded as a victory for the crypto industry.

It is because the fine is significantly smaller than what the SEC had been after. The price of the XRP token recorded an increase of 18% once news of the ruling broke.

Currently, it is the only crypto token to record an increase today, as it recorded a 16% increase to change hands at $0.60 in the last 24 hours.

The Details

Torres said in the ruling that the violation of the securities laws was undoubtedly a serious offense and it is quite lucrative.

However, she added that the case did not involve any allegations of misappropriation, fraud, or any other such culpable conduct.

Moreover, the judge added that the SEC had not been able to establish that Ripple’s actions of not registering the institutional sales resulted in substantial losses for investors.

Chief executive at Ripple, Brad Garlinghouse, shared his feelings about the latest ruling of the judge on X.

The CEO said that the court had reduced the SEC’s demand by 94%, as it recognized that the regulator had overplayed its hand.

He added that the ruling was a win for Ripple, along with the whole of the crypto industry, not to mention the rule of law.

He went on to say that they were finally rid of the SEC’s headwinds against the entire XRP community.