XRP Wins Big Against SEC: Court Confirms It’s Not a Security

In a pivotal ruling, Judge Analisa Torres has ordered Ripple Labs to pay $125 million in civil penalties, concluding a four-year-long lawsuit with the SEC. The lawsuit, which began in November 2020, accused Ripple of conducting unregistered securities sales. This decision marks a significant moment in the crypto space, clarifying Ripple’s standing and the regulatory landscape for digital assets.

Ripple’s legal team argued for clarification in the judgment, ensuring that it does not bar ODL sales or extraterritorial conduct. The court agreed, noting the SEC’s proposed language was too broad.

On Wednesday, Judge Torres ruled that Ripple would pay a $125 million fine and prohibited the company from future securities law violations. This ruling is seen as a partial victory for Ripple, as the SEC originally sought a much larger penalty of $2 billion. The Court found that while Ripple’s institutional sales of XRP violated federal securities laws, its programmatic sales to retail clients did not.

The fine imposed on Ripple includes penalties for 1,278 institutional sales transactions that violated securities laws. The Court’s ruling follows a previous decision in July 2023, where it was determined that Ripple’s retail sales through exchanges were lawful. This ruling differentiates between institutional and retail sales, a significant point of clarification for the crypto industry.

Judge Torres also issued an injunction against Ripple to prevent future violations of securities laws. She highlighted Ripple’s potential to push regulatory boundaries, justifying the need for such an injunction. This measure aims to ensure Ripple complies with securities regulations moving forward.

Following the ruling, XRP’s price surged by 20% despite a broader market downturn. The ruling provided a clear stance on Ripple’s legal obligations and future conduct, offering some regulatory clarity. The decision also reflects ongoing debates within the crypto community about regulatory frameworks and enforcement.