Judge Fines Ripple $125M, Bans Future Securities Law Violations in Long-Running SEC Case

A
federal
judge
ordered
Ripple
to
pay
$125
million
in
civil
penalties
and
imposed
an
injunction
against
future
securities
law
violations
on
Wednesday.

District
Judge
Analisa
Torres,
of
the
Southern
District
of
New
York,

imposed
the
fine
after
finding
that
1,278
institutional
sale
transactions
by
Ripple
violated
securities
law,
leading
to
the
fine.
The
$125.035
million
fine
is
well
below
the
$1
billion
in
disgorgement
and
prejudgment
interest
and
$900
million
in
civil
penalties
the
SEC
sought.

Wednesday’s
order
on
remedies
follows
the
judge’s
July
2023
ruling
in
the
case
itself,
finding
that
Ripple
violated
federal
securities
laws
through
its
direct
sale
of
XRP
to
institutional
clients,
though
she
also
ruled
that
Ripple’s
programmatic
sales
of
XRP
to
retail
clients
through
exchanges
did
not
violate
any
securities
laws.

The
SEC
tried
unsuccessfully
to
appeal
that
portion
of
the
ruling
while
the
case
was
ongoing.

Judge
Torres
also
banned
Ripple
from
future
violations
of
federal
securities
laws
on
Wednesday,
saying
that
while
she
isn’t
making
a
judgement
that
Ripple
has
violated
any
laws
after
the
SEC
filed
its
lawsuit,
the
company
may
well
“cross
the
line”
in
a
section
referring
to
Ripple’s
“on
demand
liquidity”
offerings.

“Rather,
the
Court
finds
that
Ripple’s
willingness
to
push
the
boundaries
of
the
Order
evinces
a
likelihood
that
it
will
eventually
(if
it
has
not
already)
cross
the
line,”
she
said.
“On
balance,
the
Court
finds
that
there
is
a
reasonable
probability
of
future
violations,
meriting
the
issuance
of
an
injunction.”

The
injunction
document
requires
Ripple
to
file
a
registration
statement
if
it
intends
to
sell
any
securities.

The
SEC
is
likely
to
appeal
the
July
2023
ruling
now
that
the
judge
has
imposed
a
sentence,
after
the
same
judge
denied
the
SEC’s
motion
for
an
interlocutory
appeal
last
year.

The
SEC
and
Ripple
settled
charges
tied
to
CEO
Brad
Garlinghouse
and
other
executives
after
that
interlocutory
appeal
was
denied.

The
price
of
XRP
rose
3
cents,
or
around
2%,
after
the
judgement
was
published.