District Judge Analisa Torres, of the Southern District of New York, imposed the fine after finding that 1,278 institutional sale transactions by Ripple violated securities law, leading to the fine. The $125.035 million fine is well below the $1 billion in disgorgement and prejudgment interest and $900 million in civil penalties the SEC sought.
Wednesday’s order on remedies follows the judge’s July 2023 ruling in the case itself, finding that Ripple violated federal securities laws through its direct sale of XRP to institutional clients, though she also ruled that Ripple’s programmatic sales of XRP to retail clients through exchanges did not violate any securities laws. The SEC tried unsuccessfully to appeal that portion of the ruling while the case was ongoing.
“Rather, the Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line,” she said. “On balance, the Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction.”
The injunction document requires Ripple to file a registration statement if it intends to sell any securities. The SEC is likely to appeal the July 2023 ruling now that the judge has imposed a sentence, after the same judge denied the SEC’s motion for an interlocutory appeal last year.The SEC and Ripple settled charges tied to CEO Brad Garlinghouse and other executives after that interlocutory appeal was denied.
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