After a prolonged legal standoff with the U.S. Securities and Exchange Commission (SEC), Ripple Labs has been fined $125 million for the unregistered sale of its XRP tokens. This decision comes after a court ruling found Ripple in violation of Section 5 of the Securities Act, which mandates the registration of securities before the public offering. Despite the penalty, the fine is significantly lower than the SEC’s original demand of $2 billion, marking a partial victory for the cryptocurrency firm.
A Partial Victory for Ripple
The ruling was delivered by Judge Analisa Torres in the Southern District of New York, concluding several years of legal confrontations between XRP and the SEC since the lawsuit’s inception in December 2020. The penalty specifically addresses Ripple’s sales of XRP to institutional investors, transactions the SEC argued should have been registered as securities. In total, 1,278 transactions were found to violate federal law.
Popular account on X and self-proclaimed XRP evangelist, JackTheRippler, shared his thoughts on the outcome:
Tomorrow, in two weeks, is the deadline for the SEC!
If they wanted to appeal, they would have done it weeks ago. Filling out an appeal document takes 15 minutes.
💥 Major #XRP News ANYTIME! 💥 pic.twitter.com/LXZHS7kJaP
— JackTheRippler ©️ (@RippleXrpie) September 22, 2024
XRP’s Response: A Call for Regulatory Clarity
Advertisement
Despite the penalty, Ripple CEO Brad Garlinghouse and his team have framed the outcome as a significant win. “We respect the Court’s decision and have clarity to continue growing our company,” Garlinghouse stated, emphasizing that XRP will pay the fine from its reserves without impacting ongoing operations. The company seized the moment to advocate for a clearer and more balanced regulatory framework for the cryptocurrency industry, accusing the SEC of overreach.
The XRP Team remains optimistic about its future, especially since the court dismissed several key claims made by the SEC. Notably, earlier rulings confirmed that programmatic sales of XRP on public exchanges did not constitute securities violations—a critical point of contention throughout the case.
Turning the Page Amid Ongoing Regulatory Debates
While XRP’s legal troubles with the SEC may be concluding, the broader conversation around cryptocurrency regulation in the U.S. is far from over. The court’s ruling permanently enjoins XRP from future securities law violations but highlights the lack of regulatory clarity in the digital asset space. Garlinghouse’s remarks underscore XRP’s view that the SEC’s actions have slowed innovation in the crypto industry and emphasize the need for a regulatory reset.
With the legal cloud lifting, XRP is poised to refocus on its core mission—expanding its global digital payment infrastructure. The outcome of this case could also signal a turning point in how U.S. regulators approach the fast-evolving world of digital assets.
As XRP moves forward, the crypto industry watches closely, hopeful that this case will pave the way for clearer regulations and a more supportive environment for innovation in the United States.
Advertisement
Also Read: Hamster Kombat to Distribute 60B HMSTR in Airdrop, But Less Than Half of Users Qualify