A Manhattan court has ruled that Ripple Labs must pay the U.S. Securities and Exchange Commission (SEC) approximately $125 million in penalties related to the unauthorized sale of its cryptocurrency, XRP, according to court documents.
Context and Implications
The SEC initially sought $2 billion in fines and penalties in its case against Ripple Labs, but the court’s ruling resulted in a penalty significantly lower than that amount.
The SEC’s legal action against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen began in 2020, with accusations of illegally raising over $1.3 billion through an unregistered securities offering via XRP sales. However, in October, the SEC dropped its remaining claims against Garlinghouse and Larsen. This case has been closely monitored, as it represents one of the most significant actions the SEC has taken in the cryptocurrency sector.
Responses
“We respect the court’s decision and now have the clarity needed to continue growing our company,” Ripple CEO Brad Garlinghouse stated on social media platform X.
In response to the ruling, an SEC spokesperson emphasized, “As court after court has stated, the securities laws apply when firms offer and sell investment contracts, regardless of the technology or labels they use.”
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