In a long-awaited decision, a federal judge has levied a $125 million fine on Ripple Labs, concluding that the cryptocurrency company violated securities laws in its sales to institutional investors. The ruling, while a partial victory for the Securities and Exchange Commission (SEC), also reaffirmed the judge’s previous stance that Ripple’s XRP sales to retail investors through exchanges did not constitute securities.

The case, which has dragged on for years, has been closely watched by the cryptocurrency industry as a potential test case for the regulatory landscape. The SEC has argued that XRP is a security and therefore subject to registration requirements. Ripple has maintained that XRP is a digital currency.

Judge Analisa Torres of the Southern District of New York found that Ripple’s direct sales of XRP to institutional clients crossed the line into securities territory. However, she stood by her earlier determination that Ripple’s programmatic sales to retail investors did not.

Ripple’s XRP Receives Regulatory Clarity

The $125 million fine is significantly lower than the SEC’s initial demands, which totaled over $1 billion. Despite the reduced penalty, the injunction barring Ripple from future securities law violations is a significant blow to the company. The judge expressed concerns about Ripple’s willingness to “push the boundaries” of regulatory compliance.

With the judge’s decision now finalized, the SEC is expected to appeal the portion of the ruling that favored Ripple. The outcome of this appeal could have far-reaching implications for the cryptocurrency industry.

While the price of XRP experienced a modest increase following the ruling, the long-term impact on the cryptocurrency remains uncertain.

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