NY Judge Fines Ripple $125M After Prolonged SEC Lawsuit

In a case brought by the Securities and Exchange Commission (SEC), ANALISA TORRES, a New York District Judge, ordered Ripple Labs to pay a $125 million civil penalty and declared the company “permanently restrained and enjoined” from violating US securities laws.

The Ripple SEC case comes to an end

In a filing on August 7 in the US District Court for the Southern District of New York, Judge Analisa Torres ruled Ripple liable for more than $125 million, which it was required to pay to the SEC within 30 days. 

The verdict came after fighting motions from Ripple and the financial regulator, who argued that the company should pay a maximum civil penalty of $10 million or $2 billion, respectively.

The filing said, “Based on the Court’s independent analysis of Ripple’s expert report summarizing the relevant contracts […] the Court finds that 1,278 transactions violated Section 5, resulting in a civil penalty of $125,035,150.”

In an Aug. 7 X post, CEO Brad Garlinghouse adds, “We respect the Court’s decision and have clarity to continue growing our company […] The SEC’s headwinds against the whole of the XRP community are gone.”

The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.

This is a victory for Ripple, the industry and the rule of law. The SEC’s…

— Brad Garlinghouse (@bgarlinghouse) August 7, 2024

On Wednesday, Judge Torres also told Ripple that they can’t break federal securities laws again. She said that she wasn’t saying that Ripple had broken any laws after the SEC sued but that the company may have crossed the line in a section about its “on-demand liquidity” offerings.

“Rather, the Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line,” she said. “On balance, the Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction.”

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