SEC Takes Loss as Court Orders Ripple to Pay US$125 Million, XRP Explodes to Almost 30% for Brief Period

It’s so over… Not for Ripple, though. XRP is currently up around 18.5% in the daily chart. This increase comes after Judge Analisa Torres settled the case with a US$125 million (AU$191 million) fine for Ripple.

The fine is just a fraction of what the Securities and Exchange Commission (SEC) requested initially, over US$1 billion (AU$1.5 billion) in disgorgement and prejudgment interest and US$900 million (AU$1.37 billion) in civil penalty (yeah, that much).

Needless to say, XRP skyrocketed to US$0,63 (AU$0,97), an almost 30% increase in the daily chart. However, it has settled at the US$0.60 (AU$0.91) level. The chart looks wild:

Judge Torres’s Ruling

“The SEC’s motion for remedies and the entry of final judgment is GRANTED IN PART and DENIED IN PART. The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150,” reads the filing.

Related: Ripple to Allocate US$10 Million to Tokenised US Treasury Bills on XRP Ledger in Crypto Tokenisation Push

However, Judge Torres’s ruling also included an injunction against Ripple, preventing future violations of securities laws, and mandated that Ripple must file a registration statement if it intends to sell any securities.  

The SEC Takes a Hit 

The legal battle ignited by the SEC against Ripple Labs and its executives is coming to an end after nearly 4 years in the making. By 2023, Judge Torres granted Ripple Labs its first win ruling that XRP is not a security by definition, causing XRP’s price to explode upwards. 

After months of legal back-and-forth, the case is over with a US$125 million fine imposed after finding that 1,278 institutional sales of XRP violated federal securities laws. However, the sales of XRP to retail clients through exchanges did not violate any securities laws. The SEC tried to unsuccessfully appeal this last part of the ruling, yet it was dismissed.

Related: Ripple Forms Partnership to Boost Blockchain Adoption Across Brazil

Brad Garlinghouse, CEO at Ripple, celebrated the ruling as a victory for Ripple Labs and the XRP community. He highlighted that the US$125 million fine is a statement of how the SEC “overplayed their hand”.

The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company. This is a victory for Ripple, the industry and the rule of law.

Brad Garlinghouse, Ripple CEO

Overall, the XRP community and market observers have reacted positively to the news, with Bloomberg analyst James Seyffart saying it’s an “L for the SEC’s ‘regulation via enforcement’ stance”.

Aussie analyst Jason Pizzino, though, pointed to the short-lived impact the ruling had on the price of XRP – adding his own commentary on the situation by citing a well-known trading rule.