XRP News Today: Manhattan Court Upholds $125 Million Penalty on Ripple for XRP Sales

A recent ruling by a Manhattan federal court has reaffirmed the application of existing securities laws to digital assets like XRP, despite a more crypto-friendly stance from the SEC. U.S. District Judge Analisa Torres denied a joint request from Ripple Labs and the SEC to reduce a $125 million penalty and remove an injunction related to XRP’s classification as an unregistered security. This decision underscores the enduring legal framework governing digital assets, even as regulatory attitudes evolve.

The court’s ruling emphasizes that the SEC’s enforcement actions maintain legal weight, and neither party can disregard a court’s final judgment on securities violations. This principle reinforces the lasting legal consequences of regulatory enforcement actions, regardless of shifts in agency policy or leadership. The SEC initially sought a $2 billion penalty under former Chair Gary Gensler, but the court had previously reduced this to a more moderate figure, reflecting the nuanced nature of Ripple’s sales practices.

Judge Torres’ decision highlights the enduring power of the SEC to enforce securities laws, even as regulatory attitudes evolve. The court recognized that while Ripple’s programmatic sales of XRP did not violate securities laws, its institutional sales did, justifying the penalty. This ruling sets a precedent that could influence how other digital assets are regulated and litigated in the future, emphasizing the importance of compliance with securities laws.

Ripple’s Chief Legal Officer, Stuart Alderoty, responded on social media, stating that “the ball is back in our court,” signaling the company’s intention to continue its legal battle or explore other options. He emphasized that XRP’s legal status as not being a security remains unchanged from Ripple’s perspective. The market reaction to the ruling was modest, with XRP trading around $2.12. Over the past year, XRP’s price has surged, a trend analysts attribute partly to reduced regulatory uncertainty following the SEC’s softened stance.

This ruling illustrates the lasting impact of enforcement actions initiated under previous SEC leadership, particularly former Chair Jay Clayton. Despite efforts by the current administration to adopt a more crypto-friendly regulatory approach, courts continue to uphold earlier judgments. Judge Torres pointed out that the SEC has dismissed other crypto cases before violations were found, making the Ripple case a notable exception. This sets a precedent that could influence how other digital assets are regulated and litigated in the future, emphasizing the importance of compliance with securities laws.

The court also highlighted that both parties have the option to end the litigation by withdrawing their appeals, which could bring finality to this protracted legal dispute. Ripple has previously indicated a willingness to escalate the case to the Supreme Court if necessary, underscoring the high stakes involved. Meanwhile, the SEC’s approach continues to balance enforcement with a recognition of the crypto industry’s growth and innovation potential.

Judge Torres’ decision reaffirms the SEC’s regulatory authority over digital assets like XRP, even amid changing political and regulatory climates. The ruling sends a clear message that compliance with securities laws remains paramount and that court judgments carry enduring legal force. For Ripple and the broader crypto industry, this case highlights the complex interplay between innovation, regulation, and legal accountability, shaping the future trajectory of digital asset governance.