The fine, imposed by Judge Analisa Torres, is far less than what the SEC had sought.
The SEC had requested $1 billion in disgorgement and prejudgment interest, along with $900 million in civil penalties. Let’s discover more about this news for Ripple.
Ripple’s $125M Fine Less Than SEC’s Request
Judge Torres’s ruling focused on Ripple’s direct sales of XRP to institutional clients. The fine specifically addresses 1,278 institutional sale transactions that were deemed non-compliant with federal law. However, the judge reiterated her previous finding that Ripple’s programmatic sales of XRP to retail clients through exchanges did not violate securities laws. This distinction is crucial as it separates Ripple’s institutional activities from its retail operations, which were deemed lawful.
In addition to the financial penalty, Judge Torres issued an order banning Ripple from future violations of federal securities laws. While she did not make any new judgments about Ripple’s conduct after the SEC’s lawsuit, she did issue a caution. She warned that the company’s “on-demand liquidity” offerings could potentially cross legal boundaries. This suggests that while Ripple’s past actions were scrutinized, future activities remain under close watch.
Source: X
The July 2023 ruling, which led to Wednesday’s order on remedies, clarified that Ripple’s programmatic sales to retail clients were compliant with the law. This finding is significant because it delineates between different types of transactions and their legal implications. Ripple’s institutional sales, however, were found to be problematic, leading to a substantial fine.
The lower-than-expected fine indicates a partial victory for Ripple, as it avoids the more severe financial consequences initially sought by the SEC. Nonetheless, the ongoing scrutiny and regulatory challenges reflect the broader uncertainties and legal debates surrounding the cryptocurrency industry.
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