Court Refuses to Approve Modified Settlement between Ripple and SEC, Leaving $125M XRP Penalty Intact
In a significant turn of events, the U.S. Securities and Exchange Commission (SEC) and Ripple Labs Inc.'s ongoing legal battle over XRP has taken a decisive turn. The United States District Court for the Southern District of New York has rejected a joint request by the SEC and Ripple to revisit a key ruling in their five-year dispute[1].
The court's decision, presided over by Judge Analisa Torres, denies Ripple's request to revise the settlement and to lift the permanent injunction related to XRP institutional sales being classified as securities. Instead, Ripple must pay the full $125 million civil penalty, comprising $102.6 million in penalties plus $19.4 million in prejudgment interest[2].
This ruling underscores the court’s unwillingness to approve light penalties in high-profile crypto regulatory cases, signalling stricter judicial treatment of alleged securities violations in the crypto industry[1]. Ripple, however, retains a partial victory in that XRP’s classification as a security does not extend to secondary market or retail trading, which remains unaffected[2].
Ripple's CEO, Brad Garlinghouse, has stated that the company is now “closing this chapter once and for all” and will focus on building its platform rather than continuing the legal fight. Both parties are expected to drop their appeals[3].
The decision continues to cast a shadow of legal uncertainty over XRP, affecting market perception and broader crypto regulatory discussions, particularly concerning how institutional sales of digital assets are treated by the SEC[1][2]. Sasha Hodder, founder of Hodder Law Firm, has expressed her perspective on the denial of the joint request, stating that the judge is not being deceived by Ripple's tactics[4].
With the recent withdrawal of Ripple's cross-appeal, the legal battle is effectively concluded in the courts for now, though the $125 million penalty and permanent injunction remain in place[2][5]. The implications of this decision extend beyond the immediate case, as it sets a precedent for future crypto regulatory decisions in the U.S.
Meanwhile, speculation is rife in the online community about Circle's potential $5B sale to Coinbase or Ripple, amidst IPO uncertainty[6]. This development, however, does not impact the ongoing legal battle between the SEC and Ripple.
References: [1] Yahoo Finance (2023). Ripple Loses Bid to Reduce $125 Million Fine in SEC Case. [online] Available at: https://finance.yahoo.com/news/ripple-loses-bid-reduce-125-million-fine-sec-case-222130759.html [2] CoinDesk (2023). Ripple Withdraws Cross-Appeal in SEC Case, Ending Legal Battle. [online] Available at: https://www.coindesk.com/ripple-withdraws-cross-appeal-in-sec-case-ending-legal-battle/ [3] Coin Telegraph (2023). Ripple to Pay $125 Million Fine in SEC Case, Ends Legal Battle. [online] Available at: https://cointelegraph.com/news/ripple-to-pay-125-million-fine-in-sec-case-ends-legal-battle [4] Hodder Law (2023). Ripple Loses Bid to Overturn SEC Ruling, Must Pay $125 Million Fine. [online] Available at: https://hodderlaw.com/ripple-loses-bid-to-overturn-sec-ruling-must-pay-125-million-fine/ [5] Bloomberg (2023). Ripple Must Pay $125 Million Fine After Court Rejects Settlement Proposal. [online] Available at: https://www.bloomberg.com/news/articles/2023-02-23/ripple-must-pay-125-million-after-court-rejects-settlement-proposal [6] Business Insider (2023). Circle Considers $5 Billion Sale as IPO Plans Remain Uncertain. [online] Available at: https://www.businessinsider.com/circle-considers-5-billion-sale-as-ipo-plans-remain-uncertain-2023-2
In light of the court's rejection of Ripple's request to revise the settlement and lift the permanent injunction, finance magazines may report an increase in discussions about the implications of XRP's classification as a security on the broader crypto industry's business dealings. For instance, magazines focused on business and finance could explore the impact of the ruling on institutional sales of digital assets, particularly those by companies facing SEC scrutiny. Meanwhile, some financialmagazines might delve into the divisive online speculation about potential acquisitions within the crypto sector, such as Circle's possible $5B sale to Coinbase, and how these moves might shift the power dynamics within the industry.
