Ripple logo on phone screen. Source: sdx15 - stock.adobe.com

Key Takeaways:

A federal judge ordered Ripple Labs to pay a $125 million civil penalty for using XRP as an unregistered security.
The court found Ripple liable for 1,278 transactions violating U.S. securities laws and restrained the company from future violations.
Following the ruling, the XRP token’s price surged by 24%.

A federal judge has ordered Ripple Labs to pay a $125 million civil penalty in an ongoing SEC case alleging that the blockchain firm used XRP as an unregistered security.

The judgment, issued by Judge Analisa Torres, found Ripple liable for 1,278 transactions violating Section 5 of U.S. securities laws.

The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.

This is a victory for Ripple, the industry and the rule of law. The SEC’s…
— Brad Garlinghouse (@bgarlinghouse) August 7, 2024

The court restrained Ripple from future violations, noting the likelihood of such occurrences.

Ripple’s CEO, Brad Garlinghouse, called the ruling a victory, emphasizing the reduced penalty from the SEC’s initial proposals.

Ripple’s legal chief, Stuart Alderoty, affirmed the company’s compliance with the fine.

A final judgment. The Court rejects the SEC’s suggestion that Ripple acted recklessly and she reminds the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm. She rejects the SEC’s absurd demand for $2B in… https://t.co/RbwpBnoXJG
— Stuart Alderoty (@s_alderoty) August 7, 2024

This decision marks a significant development in the case initiated by the SEC in December 2020.

The XRP token’s price surged by 24% following the announcement.