Ripple Labs Must Pay a $125 Million Fine, After a Federal Judge Found That 1278 Sales of the Xrp Token Violated Securities Laws

However, the penalty was well below the $2 billion the US Securities and Exchange Commission had asked Judge Analisa Torres to dish out.

A federal judge has ordered Ripple Labs to pay a $125 million fine for violating securities laws with 1,278 sales of XRP tokens, a penalty that fell short of the $2 billion requested by the US Securities and Exchange Commission (SEC).

“This is a victory for Ripple, the industry and the rule of law,” Ripple CEO Brad Garlinghouse said in a tweet. “The SEC’s headwinds against the whole of the XRP community are gone.”

CoinGecko data showed that XRP's price rose 19.4% in 24 hours to almost $0.62 on Thursday, bringing the cryptocurrency's total market value to just under $35 billion.

However, Judge Analisa Torres also barred Ripple from future securities law violations on Wednesday, stating that the company had demonstrated a willingness to "cross the line."

According to industry pundits, the fine serves as a setback for the SEC, which has filed a slew of lawsuits against industry heavyweights such as Coinbase and Kraken.

The SEC's request for $2B was slashed by ~94% by the Court, which recognized their excessive demands. We appreciate the Court's decision, which will allow us to continue expanding our business. This is a victory for Ripple, the industry and the rule of law. The SEC’s…

The SEC's request for $2B was slashed by ~94% by the Court, which recognized their excessive demands. We appreciate the Court's decision, which will allow us to continue expanding our business. This is a victory for Ripple, the industry and the rule of law. The SEC’s…

The fine concludes a lengthy legal battle between Ripple and the SEC.

In 2020, the markets regulator initially sued the company and its executives Christopher Larsen and Garlinghouse, alleging that Ripple illegally sold its token to both institutional and retail investors

The lawsuit served as a litmus test for whether cryptocurrencies would be subject to securities laws by regulators and courts.

In July 2023, Torres handed Ripple a partial victory.

She ruled that the company violated securities laws by selling its XRP token to institutional investors. But she also ruled that sales of the token to retail investors on trading platforms did not violate securities laws.

A ‘victory’?

Ripple hailed the fine as a victory, as it was significantly lower than the nearly $2 billion that the SEC had asked Torres to levy.

The SEC claimed that the unrepentant company continued to sell XRP to institutional investors even after Torres's ruling, and asked her to fine Ripple almost $2 billion.

According to Garlinghouse, Ripple's CEO, the court reduced the SEC's demand by around 94%, "recognising that they had overplayed their hand."

While Torres declined to rule on whether Ripple continued to sell XRP to institutional investors, she agreed with the SEC that the company appeared willing to "push the boundaries" of her ban on institutional XRP sales, and that there was "a likelihood that it will eventually — if it has not already — cross the line."

As a result, she barred Ripple from any future such violations.

Got a tip? Email at joanna@dlnews.com to reach Regulation Correspondent at DL News, Joanna Wright.

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