A New York court on Wednesday ordered fintech company Ripple to pay a $125 million fine in its lawsuit with the Securities and Exchange Commission.
The civil penalty is significantly less than the $2 billion sought by the SEC, while Ripple had proposed a fine of $10 million in April.
The SEC sued Ripple Labs in 2020 for $1.3 billion over its sale of XRP, saying the company should have registered it as a security. XRP is one of the top ten biggest cryptocurrencies, with a market cap of $29 billion as of writing.
Within an hour of the news, the price of XRP spiked more than 11 percent, to more than $0.60.
Ripple scored a partial win against the SEC last year when a judge ruled that programmatic sales of XRP to retail investors did not qualify as securities, focusing the remainder of the case on institutional sales.
“There is no question that the recurrent, highly lucrative violation of [SEC rules] is a serious offense,” wrote U.S. District Judge Analisa Torres. “However, this case 15 does not involve allegations of fraud, misappropriation, or other more culpable conduct.”
Torres also said that “the SEC has not established that Ripple’s failure to register the institutional sales caused substantial losses (or the risk thereof) to investors.”
The civil penalty was thus limited to a per-transaction fine for 1,278 transactions, for $125,035,150.
This is a developing story and will be updated as more information is available.
