This long legal battle between Ripple and the US Securities and Exchange Commission (SEC) ended (at least for now) after Judge Analisa Torres’ recent ruling that awarded the cryptocurrency company a $125 million fine. The ruling will have a huge impact on both sides, and an appeal by both sides is also planned.
What’s Next for Ripple and the SEC
Ripple will have to pay the SEC a $125 million fine for violating securities laws. The violation stemmed from the company selling XRP to institutional investors without first registering those transactions as investment contractsLast year, Judge Torres ruled that Ripple violated securities laws through its institutional sales, though she said XRP itself is not a security.
Based on the rulings, this case, which began in December 2020, is more of a win for Ripple than for the SEC. While Ripple will have to pay the SEC $125 million, the fine is significantly lower than the $2 billion it The Commission initially proposedRipple has proposed a $10 million fine, but the cryptocurrency company will have no problem paying $125 million.
While interview from CNBC, Ripple’s Chief Legal Officer (CLO) Stuart Alderoty indicated that his company intends to pay the $125 million and continue operations as soon as possible. The court order requires Ripple to pay the fine within thirty days. However, Alderoty did not provide an exact date for payment, other than confirming that the payment will be made from their balance sheet.
In addition to the $125 million fine, it is worth mentioning that Judge Torres also issued an injunction against future violations. Like the civil fine, this injunction is also considered straightforward and poses no problem for Ripple, as Alderoty described it as an “order to comply with the law.”
Patrick Daugherty of Foley and Lardner illuminated how the injunction failed to provide “real direction” to Ripple because Judge Torres did not determine whether Ripple had violated securities laws, On Demand Liquidity (ODL) ServiceThe judge found only that ODL’s service may be close to violating federal securities laws.
An appeal is still possible
An appeal is still possible, as both parties can do so within 60 days of the ruling being published. Ripple’s appeal will likely border on the institutional sales ruling, while SEC Appeal will border on Judge Torres’ ruling in the case Ripple Secondary SaleAlderoty suggested that Ripple does not intend to appeal, as he claimed the company views Judge Torres’ recent ruling as the finality of the matter.
Ripple CEO Brad Garlinghouse also seemed pleased with the ruling, based on X (formerly Twitter) fasting made what he described as a “victory for Ripple, the industry, and the rule of law.” On the other hand, SEC Statement After the ruling was issued, it was suggested that the Commission also did not intend to appeal.
Interestingly enough, Alderots mentioned that there shouldn’t be an appeal if the SEC is a “rational actor” and if this administration is earnest about hitting the “reset” button on cryptocurrencies. However, a lawyer who spoke to CoinDesk believes the commission will appeal Judge Torres’ ruling that secondary sales are not investment contact, which is a “bad precedent” for the regulator.
Featured image created with Dall.E, chart from Tradingview.com
