Ripple has been fined $125 million as part of its protracted legal battle with the U.S. Securities and Exchange Commission (SEC), according to a recent court filing.
A federal judge has ordered the XRP issuer to pay the fine after finding that its institutional sales violated federal securities laws.
“The SEC’s motion for remedies and the entry of final judgment is granted in part and denied in part,” stated the filing signed by Judge Analisa Torres. “The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150.”
In July, Ripple CEO Brad Garlinghouse indicated that he expects a resolution of the outstanding legal issues “very soon.”
District Judge Analisa Torres, of the Southern District of New York, imposed the civil penalty on Wednesday following a previous ruling that 1,278 institutional sale transactions by Ripple breached securities regulations.
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The penalty is well below the $1 billion in disgorgement and prejudgment interest, plus $900 million in civil penalties, initially sought by the SEC.
In her decision, Judge Torres reiterated her earlier stance that Ripple’s programmatic sales of XRP to retail clients through exchanges did not violate federal securities laws. The SEC’s attempt to appeal this aspect of the ruling during the ongoing case was unsuccessful.
The court’s order includes an injunction against future violations of federal securities laws by Ripple. Judge Torres said that while she is not concluding that Ripple has committed any violations post-lawsuit, there is a likelihood of future infractions.
She stated, “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.”
As part of the injunction, Ripple must file a registration statement if it intends to sell any securities. The SEC is expected to appeal the July 2023 ruling now that the final judgment has been issued, following the judge’s previous denial of the SEC’s motion for an interlocutory appeal.
Ripple and the SEC had settled charges involving CEO Brad Garlinghouse and other executives after the interlocutory appeal was denied. Following the announcement of the judgment, the price of XRP increased by approximately 2%, rising 3 cents.
A U.S. federal court judge ruled in July that a civil securities lawsuit against Ripple Labs can proceed, denying the company’s bid for summary judgment in a case alleging its CEO, Brad Garlinghouse, violated California securities laws.
In the 2017 interview on Canada’s BNN Bloomberg, Garlinghouse stated he was “very, very long” on XRP, but the lawsuit claims this was misleading because he “sold millions of XRP” throughout that year.
