In a landmark decision, Ripple has been slapped with a $125 million fine by the US Securities and Exchange Commission (SEC) after a four-year legal battle. The news of the fine caused XRP’s price to surge by 18% within minutes, reaching $0.61. District Judge Analisa Torres from the District Court of the Southern District of New York partially rejected the SEC’s demand for over $2 billion in compensation from Ripple for allegedly selling XRP as an unregistered security. Instead, the court ordered a civil penalty of $125,035,150, barring Ripple from further violations of securities laws.
Court’s Findings
The court’s ruling was based on a partial summary judgment granted to both parties earlier in July 2023. It was determined that Ripple’s institutional sales of XRP were considered investment contracts, violating securities laws. However, the court concluded that Ripple’s programmatic sales and other distributions of XRP did not meet the criteria for investment contracts under the Supreme Court’s Howey test, thereby not constituting securities sales. Interestingly, the court identified only 1,278 transactions that violated Section 5 of the Securities Act of 1933, despite the SEC’s claim that each of Ripple’s “1,700 relevant contracts” amounted to separate violations.
Market Impact and Overview
Following the court’s decision, XRP’s market outlook has seen a significant positive impact. The cryptocurrency is currently ranked #7 by market cap, with a market capitalization of $34.13 billion and a 24-hour trading volume of $2.84 billion. At the same time as the court ruling, the overall crypto market is valued at $1.94 trillion, with a 24-hour trading volume of $96.91 billion. Bitcoin dominance stands at 55.94%, indicating the broader market sentiment towards cryptocurrencies.
The $125 million fine imposed on Ripple marks a significant development in the ongoing legal battle with the SEC. The court’s findings regarding the classification of XRP sales and the subsequent penalty have implications not only for Ripple but also for the broader cryptocurrency market. As the saga continues to unfold, it remains to be seen how Ripple will navigate the aftermath of this ruling and its impact on the crypto landscape as a whole.