NEW YORK, Thursday, August 08, 2024 – Ripple Labs will pay a $125 million penalty to the Securities and Exchange Commission(SEC) to settle charges of illegally selling the XRP cryptocurrency.
The SEC alleged that Ripple raised more than $1.3 billion through unregistered securities offerings. The penalty is significantly lower than the $2 billion originally sought by the SEC.
Ripple CEO Brad Garlinghouse said the company respects the court’s decision and plans to move forward.The SEC, however, maintains that the case underscores the importance of registering securities offerings.
The SEC reiterated its position that securities laws apply to the sale of digital assets in its response to the Ripple ruling.
The agency emphasized that companies offering and selling investment contracts, regardless of the technology used, must comply with securities regulations.
This brings and end to the long-running legal battle between Ripple Labs and the U.S. Securities and Exchange Commission.
The legal tussle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs began in December 2020 when the SEC filed a lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen.
The SEC alleged that Ripple’s sale of its cryptocurrency, XRP, constituted an unregistered securities offering worth over $1.3 billion.
Ripple argued that XRP is not a security but a digital currency, similar to Bitcoin or Ethereum, and therefore not subject to SEC regulation.
The lawsuit has sparked intense debate over the SEC’s regulatory reach and the need for clearer guidelines in the rapidly evolving crypto space.
