A Manhattan court judge has ordered RippleLabs to pay approximately $125 million in penalties to the U.S. Securities and Exchange Commission (SEC) over allegations of improperly selling the cryptocurrency XRP,doge hugging cheems as per a court filing.
This amount is significantly less than the $2 billion in fines and penalties that U.S. regulators had originally sought in the prolonged legal battle against the cryptocurrency firm.
XRP token surged around 20% following the news to $0.6165.
The SEC had sued Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in 2020, alleging they had illegally raised over $1.3 billion through an unregistered securities offering by selling XRP.
However, the regulator dropped its remaining claims against Garlinghouse and Larsen in October. This case has been closely watched, as it is one of the largest brought by the SEC within the cryptocurrency sector.
"We respect the court's decision and have clarity to continue growing our company," Ripple CEO Brad Garlinghouse stated in a post on X.
He noted that the court reduced the SEC’s demand by about 94%, "recognizing that they had overplayed their hand." Garlinghouse described the outcome as a “victory for Ripple, the industry, and the rule of law,” adding that “the SEC’s headwinds against the whole of the XRP community are gone.”
In her ruling on Wednesday, U.S. District Judge Analisa Torres noted that the case did not include any allegations of fraud.
Despite the surge, the XRP token remains relatively unchanged this year. The ruling comes at a time when digital currencies have lost value amid current global market risk aversion.
Judge Torres had previously determined that XRP was subject to securities law only when sold to institutional investors, a ruling celebrated as a significant victory for the industry. The SEC continues to pursue several major cases against cryptocurrency exchanges and issuers, accusing them of offering unregistered securities.