Ripple Labs has won a significant legal battle against the U.S. Securities and Exchange Commission (SEC) after a federal court in New York ordered the company to pay $125 million in civil penalties. The ruling, delivered by District Judge Analisa Torres, found that Ripple’s 1,278 institutional sales of XRP violated securities laws. However, the penalty is far less than the $1.9 billion originally sought by the SEC.
The court also issued an injunction to prevent Ripple from future violations of securities regulations, reflecting judicial caution over the company’s “on-demand liquidity” services. Despite the SEC’s attempts to secure a more comprehensive injunction, the court declined to impose a broader restriction on Ripple’s operations.
Ripple’s CEO Celebrates Victory
Ripple’s CEO, Brad Garlinghouse, welcomed the ruling, highlighting the court’s decision to reduce the SEC’s demand by approximately 94%. He stated that this outcome provides clarity for Ripple’s future growth. Legal experts have also pointed to the ruling as a significant defeat for the SEC’s “regulation via enforcement” strategy.
Source: BNC XRP Liquid Index (XRPLX)
Stablecoin Development on Track
In a separate development, Ripple announced the beta testing of its stablecoin, Ripple USD (RLUSD), on both the Ethereum mainnet and the XRP Ledger. The stablecoin, backed by U.S. Treasuries, dollar deposits, and cash equivalents, is currently undergoing rigorous testing by enterprise partners. Ripple has committed to transparency by ensuring the stablecoin’s reserves will be audited monthly by an independent accounting firm.
While Ripple USD is not yet available for trading, the company is awaiting regulatory approval. Ripple aims to offer RLUSD alongside XRP for its global payment services, marking a significant step in its expansion into the stablecoin market, which could reach $2.8 trillion by 2028.
This dual victory in both the legal and product development arenas positions Ripple as a strong player in the cryptocurrency industry, with the potential for significant future growth.
