- Ripple was fined $125M for violating securities laws in a case with the SEC
- The fine is much lower than the $1B and $900M the SEC initially sought
- Also, a federal judge banned Ripple from future securities law violations
- XRP’s price rose to $0.608 after the judgment was published
District Judge Analisa Torres of the Southern District of New York has ordered Ripple to pay a 125.035 million fine for institutional sales of XRP that violate federal securities laws and an injunction against the company’s future violations.
However, Ripple received a less severe punishment than the SEC demanded and saw its XRP rise immediately after the announcement.
Ripple’s Securities Laws Violations
More specifically, the court ruled that Ripple’s 1,278 institutional sales of XRP violated federal securities rules, which prompted the fine.
However, the $125.035 million fine is significantly lower than the $1 billion fine for disgorgement and prejudgment interest and $900 million in civil penalties initially requested by the SEC.
She also stated that Ripple’s programmatic sales of XRP to retail customers through exchanges did not violate securities laws, which the SEC unsuccessfully challenged.
In turn, the XRP price rose to $0.608, or about 2%.
Injunction and Future Implications for Ripple
Judge Torres issued an injunction against Ripple to prevent any future violations of federal securities laws, expressing concern about Ripple’s potential to “cross the line” in its “liquidity-on-demand” offerings.
The injunction requires Ripple to file a registration statement before selling any securities, signaling stricter oversight in the future. With this ruling, there is speculation that the SEC will appeal the July 2023 decision, especially after dismissing the preliminary appeal.
Conclusion
Ripple’s legal troubles have already become a long-running series in the crypto industry, and everyone is watching closely.
However, this does not destroy the company, and it remains one of the most significant ones, albeit facing new challenges.
Also, this example can serve as a reminder that regulation in the crypto industry cannot be circumvented even by being one of the central companies, and they can force companies to say goodbye to colossal sums of money.
It makes much more sense for companies to protect their reputations and devote funds to research and development rather than handing them over to regulators or intending to circumvent them.
