Ripple CEO Hails Court Ruling in Case Brought by SEC
Blockchain solutions provider Ripple Labs was ordered by a federal judge to pay a civil penalty of $125 million in a case brought by the Securities and Exchange Commission (SEC) and centered on the company’s sale of its XRP token to institutional investors.
The SEC had sought a total of $2 billion in civil penalties, disgorgement and interest, while Ripple Labs had argued that it should not have to pay more than $10 million, Bloomberg reported Wednesday (Aug. 8).
In a Wednesday post on X, Ripple CEO Brad Garlinghouse said the court’s ruling is “a victory for Ripple, the industry and the rule of law” and that “the SEC’s headwinds against the whole of the XRP community are gone.”
“The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand,” Garlinghouse said in the post. “We respect the Court’s decision and have clarity to continue growing our company.”
Garlinghouse said in July that the cryptocurrency industry was seeking regulatory clarity from the United States and that America lags behind the more than two dozen other countries that have already adopted crypto regulations.
The SEC sued Ripple Labs in 2020, alleging that the company broke the regulator’s rules by selling the digital token without registering it as a security, according to the Bloomberg report.
In July 2023, U.S. District Judge Analisa Torres ruled that XRP was covered by securities laws only when it was sold to institutional investors, the report said.
On Wednesday, Torres ruled in favor of the SEC’s request to bar Ripple from conducting unregistered offerings of XRP to institutional investors but denied the regulator’s request that the company pay disgorgement of profits from its sales to institutional investors, per the report.
Instead, Torres ordered Ripple to pay a civil penalty of $125 million, according to the report.
Torres said that the case does not involve allegations of fraud, and that the SEC has not shown that Ripple’s actions caused investors any substantial losses, per the report.
Following the ruling, the value of the XRP token rose as much as 25%, the report said.
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