Author: Felix, PNews
Ripple's years-long lawsuit against the US SEC has made progress again. In a document submitted to the US District Court for the Southern District of New York on August 7, Judge Analisa Torres ruled that Ripple should bear more than $125 million in compensation liability and pay the fine to the SEC within 30 days; in addition, an injunction document was issued to prohibit Ripple from further violating securities laws. If Ripple plans to sell any securities, it must submit a registration statement.
Regarding the injunction preventing Ripple from violating securities laws in the future, Judge Torres said that sales conducted by the company after the SEC filed its complaint may not have violated federal law, but that “the likelihood of future violations is so great that it warrants an injunction.”
Judge Torres' ruling was a mixed blessing for both parties. While the court found that certain XRP sales did constitute securities offerings, it also ruled that XRP itself was not a security. This was a "major victory" for Ripple and has caused an uproar in the cryptocurrency market, with XRP's price soaring. Coingecko data shows that XRP rose 19.2% in 24 hours.
“Ripple declares victory”
Because the amount is far less than the $1 billion in illegal gains and pre-judgment interest and $900 million in civil penalties requested by the SEC. CEO Brad Garlinghouse said on the X platform that given that the court reduced the fine proposed by the SEC by 94%, the ruling is a "victory for Ripple, the industry and the rule of law."
“The SEC sought $2 billion in damages, and the court found that they had overreached, so they reduced the amount by about 94%. We respect the court’s decision and have made it clear that we will continue to grow our company. This is a victory for Ripple, the industry, and the rule of law. The SEC’s resistance to the entire XRP community has disappeared.”
Earlier in July, Brad Garlinghouse expected the company to settle its years-long lawsuit with the U.S. SEC "soon." Data from analysis firm Santiment showed that the level of activity on the XRP ledger and the creation of new addresses have also reached their highest level since March.
Ripple Chief Legal Officer Stuart Alderotyz said the company will "respect the $125 million fine." "The judgment is final. The court rejected the SEC's suggestion that Ripple acted recklessly and reminded the SEC that this case does not involve any allegations of fraud or willful misconduct, and no one suffered any financial loss. She rejected the SEC's ridiculous request for a $2 billion fine and penalties. We respect the $125 million penalty imposed by the court."
The lawsuit is not over yet
In 2020, the US SEC accused Ripple of raising $1.3 billion by selling XRP, claiming that XRP was an unregistered security.
In July 2023, the judge ruled that Ripple's direct sale of XRP to institutional clients violated federal securities laws, but its programmatic sale of XRP to retail investors through exchanges did not violate any securities laws. During the trial, the SEC tried to appeal this part of the ruling but failed.
Ripple's fourth consecutive victory over the SEC seems to herald that Ripple has "seen the light again", but the shadow of the lawsuit has not completely dissipated. The SEC may still appeal the ruling in the next 60 days, which means that the legal dispute surrounding XRP may continue. But this victory has undoubtedly boosted Ripple's confidence and helped to change the current sluggish market.
Related reading: SEC withdraws the lawsuit, Ripple wins again! A complete timeline of the years of tug-of-war between the two sides
