A federal judge ruled on Wednesday that cryptocurrency company Ripple Pay just over $125 million Fine for improperly selling XRP tokens to institutional investors.
The total is Approximately $2 billion Not only was it required by the Securities and Exchange Commission, $10 million cap Ripple made this claim in a court filing in April.
The fine represents remittances for 1,278 transactions that Judge Analisa Torres said violated securities laws.
Torres rejected the SEC’s request that Ripple return more than $876 million in profits from XRP sales, as well as pay $198 million in interest and a $876 million penalty.
she But on Wednesday it issued an injunction requiring Ripple to file a registration statement if it plans to sell securities in the future.
“The Court finds that Ripple’s willingness to push boundaries indicates that it may eventually cross a line, if it has not already done so,” Torres wrote in the ruling, referring to Ripple’s on-demand liquidity offering. “Taken together, the Court finds that future violations are sufficiently likely to warrant the issuance of an injunction.”
In explaining the fine, Torres stressed that the case “does not involve allegations of fraud, misappropriation, or other more egregious conduct,” adding that the SEC has not shown a link between Ripple’s failure to register its XRP sales with the SEC and investors’ significant losses.
The litigation between Ripple and the SEC is dragging on More than 3.5 yearsAuthorities sued Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen in 2020, alleging that they violated investor protection laws by selling unlicensed securities worth about $1.4 billion. He was fired last October.
in Partial victory For both sides, Judge Torres ruled in July 2023 that XRP is a security when sold to institutional investors, but not to the general public.
As with last year’s ruling, Ripple and the SEC each considered Wednesday’s ruling a victory.
“The SEC sought $2 billion, but the court found that the SEC had reduced its request by 94 percent and that the amount sought was in excess of what the SEC had sought.” Garlinghouse wrote to X on Wednesday.formerly Twitter.
But Garlinghouse’s most animated comments were: Press Release Issued by Ripple Wednesday.
“The SEC’s overreach and absurdity have been exposed,” he said. “By rejecting the SEC’s final attempt to extract unjust relief from us, the Court has confirmed what we’ve always known. [Gary] Gensler’s SEC is out of touch with reality, ignores the facts, and operates outside the law.”
Regulators also welcomed Wednesday’s ruling.
“As court after court has stated, when a company offers or sells investment contracts, the securities laws apply, regardless of the technology or name used,” the SEC said.
The SEC has filed (or threatened to do so) lawsuits against several major companies in the cryptocurrency industry in recent years, alleging that various products they offer are unregistered securities, but some crypto companies, most notably Coinbase, claim that the SEC has never publicly explained the scope of what it considers to be securities and why.
Coinbase Sued the SEC to force an explanationand CEO Brian Armstrong said the station “Suspicious behavior“, “scare tactics,” and “regulation through enforcement.”
Garlinghouse said Wednesday’s decision gives Ripple “clarity to continue growing the company.”
“The SEC headwinds against the entire XRP community are gone,” he wrote to X.
XRP, the seventh-largest cryptocurrency by market capitalization, rose as much as 25% to 64 cents after Wednesday’s ruling.
Ripple has 30 days to pay the fine.
Ripple’s legal counsel, Stuart Aldeloti, said: He told Bloomberg The company is “able to repay the debt on its balance sheet with cash,” he said, adding that it is “pleased this matter has finally been resolved.”
“I hope this signals an end to the current administration’s war on crypto,” Aldeloti said. “We need a better way forward for our industry and our country.”
In a post on X, Aldeloti called Wednesday’s ruling “Final Verdict.”
“The Court denies the SEC’s allegations that Ripple acted recklessly and reminds the SEC that this case does not involve allegations of fraud or intentional misconduct, and no one has suffered financial harm,” Aldeloti wrote.
According to CoinDesk, the SEC is likely to appeal the July 2023 ruling. The agency unsuccessfully tried to appeal parts of the ruling while the case was ongoing..
