In its legal dispute with Ripple, the U.S. Securities and Exchange Commission (SEC) has stated that it will not appeal Judge Torres’ decision. After the lawsuit ended on August 7, Ripple was hit with a civil penalty that was significantly less than what the SEC had first demanded. Without requiring disgorgement, Judge Torres ruled that Ripple must pay a $125 million civil fine for securities offenses about institutional sales.
Compared to the SEC’s initial demand for damages of about $2 billion, this ruling is a sharp contrast. In addition, to stop further breaches of Section 5 of the Securities Act, an injunction was placed.
What the Court’s Decision Means Moving Forward
The SEC said nothing as Ripple’s leadership swiftly celebrated the decision as a win on X (previously Twitter). But on Thursday, FOX Business reporter Eleanor Terrett contacted the SEC and received a statement that might portend big news for Ripple.
According to the SEC, the Court granted the SEC’s motion for remedies, which include significant civil monetary fines aggregating nearly 12 times what Ripple deemed reasonable and a prohibition prohibiting Ripple from perpetrating further violations of securities laws. The Court observed that Ripple’s obvious desire to push within the confines of the order raises the possibility that it will eventually cross the line if it hasn’t already.
The court’s recognition of the egregious nature of Ripple’s conduct and its affirmation that the rehearsed highly lucrative breach of Section 5 is obviously a serious offense were also welcomed by the SEC. It looks like both sides are happy with the result. While the SEC emphasizes the court’s support of its construction of the securities laws and the fines imposed, Ripple is happy about the large reduction in penalties.
Terrett felt an appeal of the sanctions decision from either party is unlikely, in light of this. With a definitive ruling in hand, it appears more likely that the SEC will take the July 2023 decision under appeal. However, I should clarify that I’m not a lawyer when I say that. Terrett’s perspective was supported by pro-XRP lawyer Fred Rispoli, who said on X, that the language from both camps is indicative of parties pleased with the outcome and not eager to appeal.
On Wednesday, Chief Legal Officer Stuart Alderoty and CEO Brad Garlinghouse of Ripple voiced their unmistakable joy with the result. Garlinghouse emphasized that the decision is calling the court’s decision to reject the SEC’s disproportionate demands a triumph for Ripple, the crypto sector, and the principle of law. Alderoty commended the court’s decision to reject the SEC’s outrageous cash demands and underlined that there are no claims of wrongdoing or financial loss in this instance.
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