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Highlights
- $125 Million Penalty: Ripple Labs has been ordered to pay approximately $125 million to the SEC for improperly selling [XRP] tokens, significantly less than the $2 billion initially sought by the SEC.
- Case Background: The SEC's lawsuit, filed in 2020, accused Ripple, [Brad Garlinghouse], and [Chris Larsen] of illegally raising over $1.3 billion through unregistered sales of [XRP]. The SEC dropped its claims against Garlinghouse and Larsen in October.
- Reactions: Ripple CEO [Brad Garlinghouse] welcomed the ruling, while the SEC emphasized that securities laws apply to investment contracts, irrespective of the technology used.
Ripple Labs has been ordered by a Manhattan court judge to pay the U.S. Securities and Exchange Commission (SEC) approximately $125 million in penalties for improperly selling the cryptocurrency [XRP], according to a court filing.
Why It’s Important
The SEC had initially sought $2 billion in fines and penalties against Ripple Labs, as noted by the SEC's chief legal officer, Stuart Alderoty, in March. The $125 million penalty is a fraction of that amount. The SEC's lawsuit, filed in 2020, accused Ripple, its CEO [Brad Garlinghouse], and co-founder [Chris Larsen] of raising over $1.3 billion through an unregistered securities offering by selling [XRP]. The SEC dropped its claims against Garlinghouse and Larsen in October. This case is one of the largest the SEC has pursued in the cryptocurrency sector.
The Response
"We respect the court's decision and have clarity to continue growing our company," Ripple CEO [Brad Garlinghouse] stated on X.
An SEC spokesperson commented, "As court after court has stated, the securities laws apply when firms offer and sell investment contracts, regardless of the technology or labels that they use.”
