TL;DR
- Ripple was fined $125 million by the SEC, significantly less than the initial $2 billion demand.
- The company sees this as a victory, confident even if the regulator appeals.
What Could be Next?
The legal battle between Ripple and the US Securities and Exchange Commission (SEC), which dates back to late 2020, recently witnessed a major development.
This happened at the start of August, when Judge Torres ruled that the company must pay a $125 million fine for violating certain securities laws. The sum represents a 94% deduction from the $2 billion that the regulator initially demanded.
While some interpreted the decision as a major win for Ripple and the end of the case, others reminded the SEC of its right to appeal.
The company’s chief legal officer – Stuart Alderoty – recently suggested that such an action from the agency won’t surprise him. However, he reminded that the SEC won’t be able to appeal some of the most essential court rulings:
“XRP’s status as “not a security” and the secondary market trading of XRP as “not security transactions” that is the law and that does not change even if the SEC appeals.”
Alderoty estimated that the regulator’s chances of securing a decisive win are quite slim, arguing that the Court of Appeals reverses the initial court rulings in less than 10% of the cases.
“Given Judge Torres’ careful and thoughtful treatment of all of the issues in this case, we are very confident that any appeal would stand as a challenge for the SEC. If I were advising the SEC (not as Ripple’s chief legal officer but as a lawyer), I would recommend that they do not appeal.”
Is Ripple Satisfied With the Court’s Decision?
Alderoty further stated that the company will respect the magistrates’ ruling and will pay the $125 million penalty in cash off its balance sheet.
Previously, an announcement from Ripple’s CEO Brad Garlinghouse also hinted that Ripple will not appeal the fine. The executive claimed that the court recognized that the SEC “overplayed their hand,” promising to abide by the rules.
“This is a victory for Ripple, the industry, and the rule of law. The SEC’s headwinds against the whole of the XRP community are gone,” he added.
