Ripple Fine from SEC

Ripple has been fined $125 million as part of its ongoing litigation with the U.S. Securities and Exchange Commission (SEC), according to a court filing.

The SEC’s motion for remedies and the entry of final judgment is granted in part and denied in part, as stated in the filing signed by Judge Analisa Torres of New York. The court will enter a final judgment prohibiting Ripple from further violating securities laws while imposing a civil penalty of $125,035,150.

In July, Ripple CEO Brad Garlinghouse predicted that a resolution to outstanding legal issues would come “very soon.”

In 2020, the SEC accused Ripple of raising $1.3 billion through the sale of XRP, which it claims is an unregistered security. Judge Torres previously ruled that some of Ripple’s programmatic sales of XRP did not violate securities laws due to a blind bid process. However, direct sales of the token to institutional investors were classified as securities.

Ripple’s fine is lower than the SEC’s proposed $2 billion. Ripple argued that the fine should be closer to $10 million. The SEC noted that its proposed penalty was substantial, stating that Ripple’s suggestion would be a “slap on the wrist.”

Judge Torres ordered Ripple to cease violating securities laws moving forward. She clarified that the court does not currently hold that Ripple’s post-Complaint sales violated Section 5; however, Ripple’s actions indicated a likelihood of future violations.

In October, the SEC sought to dismiss its lawsuit against Garlinghouse and co-founder Chris Larsen regarding their possible liability for illegal securities sales.

“The SEC asked for $2B, and the Court reduced their demand by ~94%, recognizing that they had overplayed their hand,” Garlinghouse stated on social media. “We respect the Court’s decision and have the clarity to continue growing our company. This is a victory for Ripple, the industry, and the rule of law. The SEC’s challenges against the XRP community are gone.”

An SEC spokesperson highlighted the court’s decision to grant the agency’s motions, which included the injunction against Ripple and emphasized that the fines exceeded Ripple’s proposal.

“The Court also addressed ‘the egregiousness of Ripple’s conduct’ and noted that ‘recurrent violations of Section 5 are a serious offense,’” the spokesperson added. “Securities laws apply when firms offer and sell investment contracts, regardless of technology.”

Updated: Aug. 7 at various times with additional details.