Ripple Labs to pay reduced fine to settle SEC case: Bloomberg
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The news: A US federal judge has ordered Ripple Labs to pay a civil penalty for selling its XRP token to institutional investors, settling a long-running and closely watched lawsuit against the crypto company, Bloomberg reported.
The numbers: Ripple has been ordered to pay a civil penalty of USD125 million ($192 million), a fraction of the almost USD2 billion penalties that US regulators had originally sought in the case. Ripple had said it shouldn’t have to pay more than USD10 million.
XRP, which is the seventh largest cryptocurrency by market value, rose as much as 25% to 64 US cents after the ruling.
The context: The US Securities and Exchange Commission (SEC) sued Ripple Labs in 2020, claiming the firm broke SEC rules when it raised money by selling the digital token without registering it as a security.
The case has been closely watched because of its implications for the scope of the SEC’s regulatory power.
US district judge Analisa Torres last year found that XRP was covered by securities law only when sold to sophisticated institutional investors, a ruling hailed as a major victory for the industry.
On Wednesday, Torres granted the SEC’s request for an injunction barring Ripple from conducting unregistered offerings of XRP to institutional investors. However, she denied the agency’s bid for Ripple to pay disgorgement of profits from its sales to institutional investors.
The source: Bloomberg
