Faced with a whopping $125 million fine, Ripple Labs’ lawsuit against the U.S. Securities and Exchange Commission (SEC) may not be over yet. Legal experts Bill Morgan and James Murphy (aka MetaLawMan) expect both sides to have good reasons to appeal.
After Judge Analisa Torres announced a heavy fine against the blockchain payment company, the legal community quickly began discussing the possibility of an appeal. This fine is not only a major blow to Ripple Labs, but also puts the SEC's regulatory authority to the test, indicating that a legal battle may have just begun.
Ripple's decision after facing $125 million fine
Ripple Labs and the SEC are facing a critical decision moment after U.S. District Judge Analisa Torres of the Southern District of New York ruled that Ripple Labs must pay a $125 million civil penalty for violating securities laws in 1,278 institutional sales transactions. At the same time, the federal judge not only issued a fine to Ripple, but also issued an order prohibiting it from violating securities laws in the future.
While the $125 million fine is a reduction from the $2 billion the SEC originally sought, it is still far more than the $10 million Ripple was willing to pay. Ripple had tried to get the fine reduced to $10 million, citing the Terraform Labs case, where the $420 million fine was only 1.27% of its total sales. Ripple believes that based on similar logic, its fine should also be reduced accordingly.
Facing this ruling, legal experts Bill Morgan and James Murphy expect that both parties are likely to appeal, given that the ruling gives the SEC and Ripple partial victories. On the other hand, the permanent injunction is undoubtedly a victory for the regulator.
Although the SEC has not yet issued an official statement on the ruling, and its decision on whether to appeal is unclear, the deadline for the SEC and Ripple to appeal appears to have begun since Judge Analisa Torres announced a $125 million fine against Ripple.
Additionally, the SEC has the opportunity to use this ruling to revisit its initial appeal that was dismissed by Judge Torres in 2023. At the time, Judge Torres ruled that XRP did not constitute a security, and the SEC subsequently attempted to appeal, but was unsuccessful.
Currently, with the latest ruling by Judge Torres, the appeal window for the SEC and Ripple has opened. This ruling not only concerns the future of Ripple, but may also have a profound impact on the regulatory landscape of the cryptocurrency industry.
U.S. election could affect SEC appeals decision
The progress of the lawsuit coincides with the U.S. presidential election cycle, which may have an impact on the Ripple case. Currently, multiple presidential candidates and their parties are seeking to establish ties with the cryptocurrency industry. In particular, Republican candidate Donald Trump has expressed his intention to replace SEC Chairman Gary Gensler after taking office.
In this context, the SEC may choose not to appeal Judge Torres’ decision as a strategy to win public support, especially from the cryptocurrency community. This strategy has been demonstrated in recent SEC actions, such as in the Binance.US case, where the SEC decided not to label third-party tokens such as Solana, Polygon, and Cardano as securities.
The SEC’s move may be an attempt to adapt to the political situation and public sentiment, especially in the cryptocurrency community, to avoid further legal disputes and possible adverse rulings. This strategic adjustment may help the SEC seek broader social support and legitimacy in the current complex political and regulatory environment.
Conclusion:
The $125 million fine faced by Ripple Labs is a key ruling in its lawsuit against the SEC. Although it is lower than the initial request, it is still a major blow to the company. Legal experts predict that this ruling may inspire both parties to appeal and bring the dispute to a new judicial stage. However, the US presidential election cycle adds variables to the case. The SEC's decision may be affected by the candidates' attitudes towards the cryptocurrency industry, showing that regulators may consider potential strategic adjustments in the face of politics and public sentiment.
The final outcome of this case will have a profound impact on the regulatory outlook for cryptocurrencies. It will not only be decisive for Ripple Labs, but may also set a precedent for the legal framework of the entire industry. As the legal and regulatory communities are paying close attention, the market expects this dispute to lead to a clear and fair resolution.
