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A Manhattan court ordered Ripple Labs, the developer behind the banking-oriented XRP blockchain, to pay the United States Securities and Exchange Commission (SEC) $125 million for its improper XRP sale.
In an Aug. 7 tweet, Ripple Labs chief legal officer Stuart Alderoty wrote that after first asking for $2 billion, the court has reduced the demand by 94%. He concluded:
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.”
In a subsequent tweet, Alderoty also noted that the court rejected “the SEC’s suggestion that Ripple acted recklessly and she reminded the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm.” He further highlighted:
We respect the $125M fine the Court has imposed for certain historic sales to sophisticated third parties.”
SEC’s crusade against crypto
The cryptocurrency industry has been butting heads with the United States SEC for a long time. Industry representatives often shared the idea that the rules imposed on the crypto space are unclear and accused the regulator of engaging in policy through enforcement.
The SEC famously claimed that most cryptocurrencies are non-registered — and consequently illegal — security investment contracts. This was the case with XRP and — after initially suggesting that it is not one— also with Ethereum (ETH).
Still, back in June the SEC recognized that Ethereum is not a security either. Ethereum developer Consensys announced at the time:
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”
Also in June, the SEC decided to continue investigating cryptocurrency exchanges. Reports at the time indicated that it could sue US-based Robinhood Markets over alleged securities violations.
