U.S. District Judge Analisa Torres has imposed a $125 million fine on Ripple Labs for violating securities laws.

In a judgment delivered on Aug. 7, Judge Torres found that 1,278 institutional sales of Ripple violated section 5 of the U.S. Securities Act. Along with the $125 million fine, Ripple is prohibited from further violations of federal securities laws. Judge Torres issued the injunction considering Ripple’s “demand on liquidity” offering, which she believed could potentially breach federal securities provisions.

The injunction mandates Ripple to formally register its intentions if it plans to sell securities in the future, ensuring compliance moving forward.

This judgment concludes a case that began in December 2020 when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs. The SEC accused Ripple of unlawfully offering securities by selling XRP without registering the token as a security, as required under U.S. federal law.

In the lawsuit, the SEC claimed Ripple had raised more than $1.3 billion through the sale of XRP without proper registration.

In July 2023, Judge Torres partially ruled in favor of Ripple, stating that the company’s programmatic sale of XRP to retail customers through crypto exchanges did not violate federal securities laws. However, she pointed out that Ripple’s institutional offerings did violate these laws.

Following this decision, the SEC requested $1 billion in disgorgement and $900 million in civil penalties against Ripple. However, Judge Torres issued a penalty more than 90% lower than the SEC’s request, which Ripple CEO Brad Garlinghouse described as a “victory” for the company and the crypto industry.

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.

Ripple’s chief legal officer, Stuart Alderoty, also commented on the court’s decision. He noted that there were no allegations of fraud or deliberate misconduct against Ripple and that no financial harm resulted from the XRP sale.

A final judgment. The Court rejects the SEC’s suggestion that Ripple acted recklessly and she reminds the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm.

Following the ruling, the price of XRP jumped 18%, currently trading at $0.6051. This marks a 39% increase over 30 days and a 0.7% improvement over 7 days.

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