Anika Begay
The U.S. Securities and Exchange Commission (SEC) has signaled that it will not appeal Wednesday’s ruling by Judge Torres in its legal battle with Ripple. The case concluded on August 7, with the company facing a significantly lower civil penalty than the SEC had initially sought.
Judge Torres’ decision imposed a civil penalty of $125 million for securities violations related to sales to institutions, along with $0 in restitution. This is in stark contrast to the approximately $2 billion in damages initially sought by the SEC. Additionally, an injunction was imposed to prevent further violations of Section 5 of the Securities Act.
SEC Breaks Silence on Ripple Ruling
While Ripple executives immediately commented on the ruling via X, celebrating it as a victory, the U.S. agency remained silent. However, FOX Business reporter Eleanor Terrett reached out to the SEC on Thursday and obtained a statement that could signal major news for Ripple.
The SEC stated: “The Court granted the SEC’s motion for remedies, including an injunction restraining Ripple from committing further violations of the securities laws and significant civil monetary penalties totaling more than 12 times the amount Ripple suggested was appropriate. As the Court noted, Ripple’s “willingness to push the boundaries of [Court’s summary judgment] The order shows the probability that sooner or later (if it has not already done so) it will exceed the limit.’”
The agency also expressed satisfaction that the court also recognized “the enormity of Ripple’s conduct” and acknowledged that “there is no doubt that the recurring and highly profitable violation of Section 5 is a serious crime.” The SEC spokeswoman continued, “As court after court has affirmed, securities laws apply when companies offer and sell investment contracts, regardless of the technology or labels they use.”
No appeal?
Thus, both sides seem to perceive the outcome as favorable. Ripple celebrates the drastic reduction in fines, while the SEC emphasizes the court’s support for its interpretation of securities laws and the penalties imposed.
Based on this, Terrett speculated, “I think it’s unlikely that either side will appeal the ruling on remedies. I think it’s more likely that the SEC will appeal the July 2023 ruling now that a final ruling has been reached. But I say that while wearing my ‘I’m not a lawyer’ t-shirt.”
Pro-XRP attorney Fred Rispoli agreed with Terrett’s assessment, commenting via X: “This language from both sides is exactly what you typically see from parties who are happy with the ruling and don’t want to appeal.”
Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty expressed clear satisfaction with Wednesday’s ruling. Garlinghouse highlighted the court’s rejection of the SEC’s heavy-handed demands, celebrating the outcome as a “victory for Ripple, the industry, and the rule of law.” Alderoty highlighted the lack of allegations of fraud or financial harm in the case, appreciating the court’s rejection of the SEC’s “absurd” financial demands.
At press time, XRP was trading at $0.6046.
Featured image created with DALL.E, chart from TradingView.com
