In just one hour, the XRP price surged 27% to a one-week high of $0.6406 on Wednesday following a significant legal ruling. Judge Analisa Torres ordered Ripple Labs to pay only $125 million of the $2 billion fine sought by the US Securities and Exchange Commission (SEC) after a four-year legal battle.
The court, applying a test derived from the Supreme Court, determined that Ripple’s Institutional Sales constituted offers or sales of investment contracts. However, it differentiated Ripple’s Programmatic Sales and Other Distributions, finding that they did not fall into this category. Additionally, the court clarified that the individual sales conducted by Ripple co-founders Chris Larsen and Brad Garlinghouse did not qualify as offers or sales of investment contracts for similar reasons.
When deliberating on the penalty, the court concluded that a first-tier penalty was appropriate, noting the absence of allegations related to fraud, deceit, or manipulation, and the lack of established deliberate or reckless disregard for regulatory requirements. Moreover, the court noted that the SEC had not proven that Ripple’s failure to register the Institutional Sales resulted in significant losses or risks to investors.
Consequently, the SEC’s motion for remedies and the entry of final judgment were partially granted and partially denied. The court’s decision mandates an injunction against Ripple to prevent future securities law violations and imposes a civil penalty amounting exactly to $125,035,150.
Ripple CEO Brad Garlinghouse stated that the court reduced the $2 billion penalty sought by the SEC by 94%, recognizing that the SEC had “overplayed their hand.” Garlinghouse further commented, “This is a victory for Ripple, the industry and the rule of law. The SEC’s headwinds against the whole of the XRP community are gone.”
With XRP not considered a security by the court, the token’s price saw one of its best rallies of the year in a matter of hours, surpassing Monday’s pre-market crash price resulting from global economic uncertainty. Demonstrating the bullishness of this development, crypto analyst CrediBULL contends that with Ripple securing this win, the stage is set for an “inevitable mega run” for the XRP price.
Another analyst under the pseudonym “360 Trader” on social media platform X also claimed that now that XRP’s “chains are off,” the XRP price will soar this cycle with a target ranging between $4 and $8. The 1D chart shows XRP’s rally following Ripple’s legal victory against the SEC.
