U.S. Judge Fines Ripple $1.25 Billion, What's Behind Ripple's 20% Surge?

Ripple Labs' long and drawn-out lawsuit with the SEC has finally come to an end, with the company ordered to pay a $125 million fine. On Monday, CoinDesk reported that U.S. District Court Judge Analisa Torres of the Southern District of New York fined Ripple $125 million after determining that the company violated federal securities laws by selling XRP to institutions last year. The judge reiterated his view that Ripple's programmatic sales of XRP to retail investors through exchanges did not violate federal securities laws.

However, Ripple's 1,278 institutional sales transactions did violate securities laws, resulting in a $125.35 million penalty. This is well below the $1 billion in disgorgement, pre-judgment interest, and $900 million in civil penalties sought by the SEC. As such, the fine is seen as good news for Ripple.

The Securities and Exchange Commission sued Ripple Labs in 2020, alleging that the company violated SEC regulations by raising money by selling digital tokens without registering them as securities, to which the Ripple CEO responded, "The SEC asked for $2 billion, and the court reduced their request to 94%. We respect the court's decision and have the clarity to continue to grow our company. This is a victory for Ripple, the industry, and the rule of law. The headwinds that the SEC has placed on the entire XRP community are gone."

The case was being closely watched for its impact on the scope of the SEC's regulatory authority, and the outcome is being analyzed for its impact on the crypto market as a whole.