Ripple Scores Major Win as SEC's $2 Billion Penalty Request Slashed by 94%

District Judge Analisa Torres has dramatically reduced the U.S. SEC's requested penalty against Ripple Labs over XRP by 94%. The court partially granted the SEC’s motion, imposing a $125 million civil penalty. Ripple CEO Brad Garlinghouse hailed this judgment as a victory for Ripple, the industry, and the rule of law.

‘A Victory for Ripple, the Industry, and the Rule of Law’

On Wednesday, Judge Torres ruled on the SEC’s motion for remedies and final judgment against Ripple Labs. The SEC had filed a lawsuit against Ripple in December 2020, alleging the company conducted unregistered securities offerings through its sale of XRP tokens. In a landmark ruling from July, the judge established significant precedents regarding XRP.

The judge's ruling stated:

The SEC’s motion for remedies and the entry of final judgment is granted in part and denied in part. 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.

The SEC had initially requested a staggering $2 billion in penalties, including a permanent injunction, disgorgement of $876 million, and prejudgment interest. Ripple opposed these demands, arguing that such sanctions were excessive.

Ripple’s chief legal officer, Stuart Alderoty, emphasized that the court rejected the SEC's claims of recklessness and pointed out that there were no allegations of fraud or intentional wrongdoing. He noted that the court dismissed the SEC's demand for $2 billion in fines, affirming the $125 million penalty imposed for specific historic sales.

Garlinghouse remarked on the significant reduction of the SEC's penalty request, stating, "The SEC asked for $2B, and the court reduced their demand by ~94%, recognizing that they had overplayed their hand. This is a victory for Ripple, the industry, and the rule of law. The SEC’s headwinds against the whole of the XRP community are gone."

What are your thoughts on the court’s ruling regarding Ripple’s case and the imposed penalty? Let us know in the comments below.