Judge Imposes $125 Million Penalty on Ripple and Bans Future Securities Violations

On Wednesday (yesterday), District Judge Analisa Torres of
the Southern District of New York ordered Ripple to pay $125 million in civil
penalties and imposed an injunction against future violations of securities
laws. This decision follows a finding that Ripple’s 1,278 institutional sale
transactions breached securities regulations.

Judge Reduces SEC Penalty

The fine of $125.035 million is significantly lower than the
$1 billion in disgorgement and prejudgment interest and the $900 million in
civil penalties sought by the SEC.

This decision follows Judge Torres’ July 2023 ruling, which
determined that Ripple’s direct sales of XRP to institutional clients violated
federal securities laws. However, she found that Ripple’s programmatic sales of
XRP to retail clients through exchanges did not constitute a violation.

IT’S OVER! The SEC v Ripple case has been quite a journey – thanks for sharing it with me.$125 Million penalty and a GENERIC injunction Order.This is a BIG win for Ripple, no doubt about it. Have a Wonderful Day! https://t.co/hCZZYsMl7E pic.twitter.com/7uuuwsx0Dw

— Jeremy Hogan (@attorneyjeremy1) August 7, 2024

SEC Likely to Appeal

The SEC had attempted to appeal the ruling concerning retail
sales while the case was ongoing but was unsuccessful. On Wednesday, Judge
Torres also issued an injunction prohibiting Ripple from future violations of
securities laws.

The judge noted that while Ripple has not been found to have
violated laws since the SEC filed the lawsuit, there is a concern that Ripple
might “cross the line” with its “on demand liquidity”
offerings.

The injunction mandates that Ripple must file a registration
statement if it intends to sell any securities. The SEC is expected to appeal
the July 2023 ruling now that the judge has imposed penalties, after previously
being denied an interlocutory appeal. Following the judgment, XRP’s price
increased by 3 cents, or approximately 2%.

This article was written by Tareq Sikder at www.financemagnates.com.
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