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Ripple’s four-year legal battle with the U.S. Securities and Exchange Commission (SEC) has finally concluded. A federal judge ruled that Ripple violated securities laws and imposed a $125 million fine on the company. The penalty is a small fraction of the nearly $2 billion in damages sought by the SEC but is seen as a turning point in the long-running case.
Ripple’s Victory, SEC’s Defeat
The lawsuit began in December 2020 when the SEC accused Ripple of illegally selling XRP. In July 2023, the court ruled that Ripple violated securities laws when selling XRP to institutional clients but found no violations in sales to individual investors through exchanges. The decision sparked significant debate in the industry and questioned the SEC’s regulatory authority over cryptocurrencies.
Last week, the court ordered Ripple to pay a $125 million fine and mandated the company to avoid similar violations in the future. Ripple’s Chief Legal Officer Stuart Alderoty stated that the decision rejected the SEC’s overreach and marked the end of the lawsuit.
Alderoty also emphasized that the court did not include allegations of fraud or market manipulation and that Ripple met its customers’ expectations.
SEC May Appeal the Decision
Meanwhile, the possibility of the SEC appealing the decision is on the table. The ruling that Ripple’s sales of XRP to individual investors through exchanges were not illegal is considered a significant loss for the SEC. An appeal could reignite the debate over classifying cryptocurrencies as securities.
While the outcome is seen as a major victory for Ripple, uncertainties persist for the cryptocurrency sector. The fragmented judicial process has hindered the establishment of a clear legal framework, leaving crypto companies facing ongoing regulatory uncertainties.
