The XRP price rallied by 27% to reach a one-week high of $0.6406 within just an hour on August 7. This remarkable surge was fueled by a ruling from Judge Analisa Torres, who mandated that Ripple Labs pay only $125 million of the $2 billion penalty sought by the U.S. Securities and Exchange Commission (SEC) after an extended four-year legal battle.
Ripple’s Court Decision
The recent ruling established that Ripple’s Institutional Sales constituted offers or sales of investment contracts, based on a test derived from the U.S. Supreme Court. However, the Court differentiated these from Ripple’s Programmatic Sales and Other Distributions, concluding that the latter did not fit within the same category. The ruling also clarified that sales conducted by Ripple’s co-founders, Chris Larsen and Brad Garlinghouse, did not qualify as investment contracts, mirroring the findings related to the Programmatic Sales.
During the penalty deliberation, the Court found a first-tier penalty appropriate due to the absence of any fraud, deceit, or manipulation allegations. Moreover, it noted that the SEC failed to demonstrate that Ripple’s failure to register its Institutional Sales had led to significant losses or risks for investors. Consequently, the SEC’s motion for remedies was granted in part and denied in part, resulting in an injunction against Ripple to prevent future violations of securities laws, alongside a civil penalty of exactly $125,035,150.
Ripple CEO Brad Garlinghouse commented on the ruling, affirming that the court had reduced the original $2 billion penalty sought by the SEC by an impressive 94%. He noted that the SEC had “overplayed their hand” and emphasized, “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.”
Bullish Predictions for XRP
With the ruling affirming that XRP is not a security, the token experienced one of its most significant price recoveries of the year, surpassing the pre-market crash levels observed earlier in the week due to global economic uncertainties.
Following this legal victory, crypto analyst CrediBULL declared that Ripple’s success sets the stage for an “inevitable mega run” for the XRP price. Another analyst known as “360 Trader” on the social media platform X expressed that XRP has been freed from restrictions, asserting that the token could soar this cycle, with XRP price targets ranging from $4 to $8.
The 1D chart shows XRP’s rally following Ripple’s legal victory against the SEC. Source: XRPUSDT on TradingView.com
Ripple’s Triumph in the SEC Lawsuit
District Judge Analisa Torres reduced the penalty demanded by the U.S. Securities and Exchange Commission (SEC) in its case against Ripple Labs, slashing it by 94%. The court’s decision partially granted the SEC’s motion for remedies, ultimately imposing a civil penalty of $125 million. Garlinghouse remarked, “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.”
On Wednesday, Judge Torres of the U.S. District Court for the Southern District of New York ruled on the SEC’s motions for remedies and final judgment against Ripple Labs. The SEC had initiated its lawsuit in December 2020, accusing Ripple of conducting unregistered securities offerings through its XRP sales. The judge had previously ruled on the case in July, delivering a landmark decision.
In her latest ruling, Judge Torres specified that the SEC’s motion for remedies and final judgment was granted in part and denied in part. Specifically, the court issued a final judgment prohibiting Ripple from further violations of securities laws and imposing a civil penalty of $125,035,150.
The SEC’s motion sought several remedies, including a permanent injunction preventing Ripple from violating Section 5 of the Securities Act, disgorgement of $876,308,712, alongside $198,150,940 in prejudgment interest, and a civil penalty equivalent to the disgorgement amount. Ripple opposed these demands, asserting that an injunction and the requested disgorgement were unwarranted and contending that any civil penalty should be notably lower, not exceeding $10 million.
Ripple’s Chief Legal Officer, Stuart Alderoty, commented on social media after the ruling, stating, “A final judgment. The court rejects the SEC’s suggestion that Ripple acted recklessly and reminds the SEC that no fraud or intentional wrongdoing allegations were involved in this case, nor did anyone suffer financial harm. She dismissed the SEC’s outrageous demand for $2 billion in fines and penalties. We respect the $125 million fine the court has imposed for certain historic sales to sophisticated third parties.”
Garlinghouse reiterated that the judge’s ruling had effectively minimised the SEC’s penalty request by 94%, commenting that when drastically reduced, the SEC’s initial demand acknowledges that they overstepped. He stated, “We respect the court’s decision and have the clarity to continue growing our company,” affirming that the outcome is a celebrated victory for Ripple and the wider industry. Stay tuned for more updates on the XRP price and Ripple’s victory over the SEC on Turkish NY Radio.
