[NEWS] SEC appeals $125 million ruling in Ripple Labs lawsuit

The U.S. Securities and Exchange Commission (SEC) has appealed a court ruling ordering Ripple to pay a $125 million fine for improperly selling the cryptocurrency XRP.

The SEC is dissatisfied with the amount, which is extremely small compared to the $2 billion it was seeking in its long-running legal battle against Ripple.

The SEC filed a lawsuit against Ripple in 2020, alleging that the company violated the law by selling cryptocurrency that constituted unregistered securities to raise funds.

The lawsuit has attracted attention from the cryptocurrency industry as it will affect the SEC's authority to regulate cryptocurrency.

In 2023, U.S. District Court Judge Analisa Torres ruled that XRP is subject to securities laws only when sold to institutional investors, not retail investors. The ruling was welcomed by the cryptocurrency industry as a de facto victory for Ripple.

The SEC, under Chairman Gary Gensler, has filed several major lawsuits against cryptocurrency exchanges and cryptocurrency issuers for offering unregistered securities.

Judge Torres issued a preliminary injunction in August ordering Ripple to stop further violations of securities laws.

But he rejected the SEC's request for Ripple to return the proceeds of the sale. The SEC had asked Ripple to pay $876 million in restitution, $198 million in interest, and $876 million in civil penalties.

Ripple, on the other hand, argued that it never had to pay more than $10 million, creating a clear disparity between the two companies.

We will fight to the end

Ripple CEO Brad Garlinghouse commented in a post on X that "If Gensler and the SEC were rational, they would have walked away from this case a long time ago. Far from protecting investors, this case has damaged the SEC's credibility and reputation. Somehow, they still haven't gotten the message. They've lost on everything that matters. Ripple, crypto, and the rule of law have already won."

He added, "We will fight in court as long as necessary, but let's be clear: XRP's non-security status remains as it is under the law today, and it will not change in the face of this erroneous and vexatious appeal. Recall that when the SEC tried and failed to file an interlocutory appeal, the SEC made it clear that it had no intention of challenging XRP's non-security status."

The SEC has no choice but to appeal under the current Biden administration. President Biden has not changed his negative stance on cryptocurrencies. If a Trump or Harris administration is elected after the November election, the SEC will transition to a new structure and the appeal may be immediately dismissed.

Reference: Notification, Garlinghouse comment
Image: Shutterstock

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