Ripple vs SEC: Judge Imposes $125M Civil Penalty on Ripple, XRP Skyrockets 25%
A federal high Judge has found Ripple guilty of violating section 5 of the Securities Act, thus imposing a hefty fine of $125 million. The case Ripple vs SEC case which has been going on since December 2020 has been followed closely by observers and market participants. Investors have been waiting and hoping for a possible end to the saga as the outcome weighs heavily on the price trajectory of XRP.
The wait may have been over after Judge Torres issued a ruling on Wednesday, August 7 that sent shockwaves through the crypto community. Consequently, the price of XRP surged by a notable 25%, shooting it above the $0.6 mark. The XRP community has celebrated this as a victory and has flooded social media with congratulations and joy.
Ripple to Pay $125 Million in Civil Penalty
In the ruling, District Judge Analisa Torres from the District Court of the Southern District of New York issued a fine that is way below the $2 billion fee demanded by the SEC for the allegations against the blockchain giant. Even though $125 million is way above the $10 million Ripple was willing to pay, it still comes as a welcomed outcome to the firm.
Interestingly, after analyzing the XRP transactions engaged by Ripple, the court found that 1,278 of these transactions violated section 5 of the Securities Act of 1933. This is particularly noteworthy because the same court previously ruled that the programmatic sales of XRP to retail clients do not break securities law.
“Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts […] the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150,” a section of the filing reads.
Ripple is expected to pay this fine within 30 days of the judgment. Additionally, Judge Torres banned Ripple from future violations of the law as this might bring the wrath of another lawsuit. The Judge pointed out that even though Ripple may not have violated federal laws after the SEC filed the lawsuit, the firm might probably do so in the future.
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