Ripple Settles with SEC: $125 Million Fine and XRP Surge

By: Isha Das

The long-standing lawsuit between Ripple and the US Securities and Exchange Commission (SEC) has finally reached a conclusion. The court has levied a $125 million fine on Ripple, putting an end to the four-year-long dispute. This development comes as a significant relief for the company and the broader crypto community.

Following the news, XRP's price surged by 18%, reaching $0.61. The ruling, handed down by District Judge Analisa Torres of the Southern District of New York, partially rejected the SEC's motion for remedies. The SEC had initially demanded over $2 billion, claiming Ripple's sales of XRP were unregistered securities. The court's final judgment is a more moderate penalty and includes an injunction against further violations of securities laws by Ripple.

The partial summary judgment granted in July 2023 laid the groundwork for the final ruling. The court found that Ripple's institutional sales of XRP constituted investment contracts and thus violated securities laws. However, it determined that Ripple's programmatic sales and other XRP distributions did not meet the criteria for investment contracts under the Supreme Court's Howey test.

Specifically, only 1,278 of Ripple's transactions were found to have violated Section 5 of the Securities Act of 1933. This stands in contrast to the SEC's suggestion that Ripple's 1,700 relevant contracts each represented a separate violation. As more details emerge, this landmark case will undoubtedly continue to shape the regulatory landscape for cryptocurrencies in the United States.