XRP surged by more than 27% in the 24 hours after a judge issued a long-awaited order in the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs.
In an order filed on Wednesday, District Judge Analisa Torres imposed a $125 million civil penalty against the San Francisco-based payments company.
In March, the SEC asked the court to order Ripple to pay a combined $1.95 billion for disgorgement, prejudgment interest and a civil penalty.
Ripple’s lawyers argued that $10 million would reflect an appropriate percentage of the company’s actual gross revenues from pre-complaint institutional sales.
Torres denied the SEC’s request for disgorgement and prejudgement interest but greenlit a smaller civil penalty.
The judge’s order was billed as a win by both sides: Ripple chief executive Brad Garlinghouse said the XRP community had finally escaped “the SEC’s headwinds.”
“The SEC asked for $2 billion, 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.”
An SEC spokeswoman stressed to Fox Business that Ripple was ordered to pay more than the firm requested.
“The Court granted the SEC’s motion for remedies including an injunction barring Ripple from committing additional violations of the securities laws and significant civil monetary penalties totaling more than 12 times the amount Ripple suggested was appropriate.”
XRP shot up from trading around $0.502 on Wednesday to a high of $0.639 on Thursday. The 7th-ranked crypto asset by market cap is priced at $0.613 at time of writing.
The SEC first sued the San Francisco-based payments firm in late 2020 for allegedly selling XRP as an unregistered security.
Last year, Torres ruled that Ripple’s automated, open-market sales of XRP did not constitute security offerings, contrary to what the SEC alleged.
The judge did, however, side with the SEC’s claim that Ripple’s sales of XRP directly to institutional buyers were securities offerings.
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