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Ripple has been fined $125 million in a lawsuit by the United States Securities and Exchange Commission (SEC), causing XRP's price to jump 20%.
The figure is just a sliver of what the Ripple community had potentially faced. Initially, the regulator sought $1 billion in disgorgement and prejudgment interest and $900 million in civil penalty.
Instead, Judge Analisa Torres ordered Ripple to pay $125 million in civil penalties and imposed an injunction against future securities law violations. Torres found that 1,278 institutional sale transactions by Ripple violated securities law.
Dating back to a 2020 lawsuit, the SEC had accused Ripple of conducting an unregistered securities offering worth $1.3 billion by selling XRP
The Judge's ruling on Wednesday follows her ruling in July 2023 in which she determined that XRP is “not necessarily a security on its face.”
“Accordingly, the SEC’s motion for summary judgment on the aiding and abetting claim against Larsen and Garlinghouse is denied,” the order detailed.
However, the SEC is likely to appeal the 2023 ruling now that Torres has imposed a sentence as she denied the SEC's motion for an interlocutory appeal last year.
Blockhead
Torres also prohibited Ripple from committing any future breaches of federal securities laws on Wednesday. She clarified that she is not determining whether Ripple has violated any laws following the SEC's lawsuit but noted that the company might "cross the line" concerning its "on-demand liquidity" offerings.
"Rather, the Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line," she said. "On balance, the Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction."
Ripple will now have to file a registration statement if it intends to sell any securities.
The XRP community has rejoiced in Ripple's sentencing, with its price jumping as high as $0.85.
Earlier this week, Ripple launched a website for its much-awaited stablecoin, Ripple USD (RLUSD).
Announced in April, RLUSD is 100% backed by USD deposits, short-term US government treasuries, and other cash equivalents. Ripple promises its stablecoin will be enterprise-grade and compliance-first.
Perion Lim
