Major demand development Ripple v incoming SEC?

TL;DR

Ripple was fined $125 million by the SEC, far less than the initial $2 billion demand. The company sees this as a victory, confident even if the regulator appeals. What could be next?

The legal battle between Ripple and the US Securities and Exchange Commission (SEC), which dates back to late 2020, recently witnessed a major development.

That happened in early August, when Judge Torres ruled that the company must pay a $125 million fine for violating certain securities laws. The sum represents a 94% deduction from the $2 billion the regulator initially demanded.

While some interpreted the decision as a major victory for Ripple and the end of the case, others reminded the SEC of its right to appeal.

The company’s chief legal officer, Stuart Alderoty, recently suggested that he would not be surprised by the agency’s action. However, he recalled that the SEC will not be able to appeal some of the most essential court rulings:

“XRP’s status as ‘not a security’ and XRP’s secondary market trading as ‘not security transactions’ that is the law and will not change even if the SEC appeals.”

Alderoty estimated that the regulator’s chances of winning a decisive victory are quite slim, arguing that the Court of Appeals reverses initial court rulings in less than 10% of cases.

“Given Judge Torres’ careful and thoughtful treatment of all the issues in this case, we are very confident that any appeal would be challenging for the SEC. If he were advising the SEC (not as Ripple’s Chief Legal Officer, but as a lawyer), I would recommend that they not appeal.”

Is Ripple satisfied with the court’s decision?

Alderoty also said the company will respect the magistrates’ ruling and pay the $125 million penalty in cash off its balance sheet.

Earlier, an announcement by Ripple CEO Brad Garlinghouse also hinted that Ripple will not appeal the fine. The executive claimed that the court recognized that the SEC “overplayed its hand,” promising to enforce the rules.

“This is a win for Ripple, the industry and the rule of law. The SEC’s headwinds against the entire XRP community are gone,” he added.

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