• A federal judge imposed a $125 million fine on Ripple for violating securities laws through institutional sales of XRP
• The judge reiterated that Ripple’s programmatic sales of XRP to retail clients through exchanges did not violate securities laws
• The SEC is likely to appeal the overall case
Ripple was fined $125 million by a federal judge on Wednesday for violating securities laws through some of its XRP sales. The fine was much lower than what the SEC originally sought. The judge also banned Ripple from future securities law violations.
Background on the SEC Lawsuit
In July 2023, Judge Analisa Torres ruled that some of Ripple’s institutional XRP sales violated federal securities laws. However, she found that Ripple’s sales to retail clients through exchanges were legal.
The SEC tried to appeal part of the ruling but was denied. After the ruling, Ripple settled separate charges with the SEC related to its executives.
Details of the Fine and Injunction
On Wednesday, Judge Torres ordered Ripple to pay a $125 million penalty for 1,278 illegal institutional sales. This was far below the $1.9 billion the SEC wanted.
The judge also imposed an injunction banning Ripple from future securities violations. She said Ripple may “cross the line” again even though it hasn’t violated laws since the lawsuit began.
Ripple must now file a registration statement for any securities it sells.
Market Reaction and What’s Next
After the ruling was published, XRP gained about 2% in price. The SEC will likely appeal the original July 2023 ruling now that sentencing has occurred.
Conclusion
While costly, the $125 million fine was much less than expected. The judge reiterated that most of Ripple’s XRP sales did not break the law. The case will likely drag on as the SEC appeals the broader ruling that went against it.
