Ripple Vs SEC Verdict Could Influence Crypto's Future
By TH3FUS3 Editorial Staff
August 14, 2024 02:44 PM
Reading time: 2 minutes, 11 seconds
TL;DR The long-running lawsuit between Ripple and the U.S. Securities and Exchange Commission has concluded. Ripple Labs has been ordered to pay a $125 million civil penalty. The outcome could influence future crypto cases.
Ripple Vs SEC: A Landmark Case Concludes
The long-running lawsuit between crypto leader Ripple and the U.S. Securities and Exchange Commission (SEC) has finally concluded. A court ordered Ripple Labs to pay a $125 million civil penalty.
This penalty is significantly less than the $2 billion initially sought by the government agency. The minor penalty could turn the tables in favor of other crypto companies.
On August 14, Bloomberg reported that the outcome of the Ripple case could help shape the future of other crypto cases.
The Binance, Coinbase, and Consensys lawsuits now have a strong precedent for resolving conflicts between parties. This verdict will influence decisions in parts of the case, such as crypto programmatic and secondary sales.
One of the most watched legal cases in crypto ended after Judge Torres issued a partial win for both parties.
Judge Torres ordered Ripple Labs to pay a $125 million civil penalty instead of the $876,308,712 initially demanded. The judge also turned down $876,308,712 in disgorgement and $198,150,940 in prejudgment interest sought by the SEC.
Implications of the Verdict
However, the judge ruled in favor of the SEC on another issue. Ripple Labs is now prevented from selling unregistered securities under Section 5 of the Securities Act 1933. Despite this, the company can continue XRP securities sales with a registration statement.
The court rejected the SEC's allegation that XRP was a security under the Howey test. Ripple contended that XRP sales didn't meet the Howey test because they occurred in the secondary market, and there was no pooling of profits. This provided a doctrine and strong precedent for future cases.
"Torres' latest Ripple vs SEC decision is good for Coinbase Global in its battle against the agency and could boost its odds of a favorable decision," said Bloomberg Intelligence analyst Elliot Stein.
Future Steps and Market Reaction
The crypto community now awaits whether the SEC or Ripple will appeal against the recent decision on remedies or any earlier rulings by the court.
Ripple Labs CEO Brad Garlinghouse and CLO Stuart Alderoty expressed satisfaction with the ruling and indicated they intend not to appeal Judge Torres' decision.
Lawyers believe the SEC can appeal last year's summary judgment and remedies decision. The agency has 60 days to appeal in the Ripple Vs SEC case. It can also happen after Ripple pays civil penalties to the regulator in 30 days.
The XRP price jumped 2% in the past 24 hours and 15% in a week, currently trading at $0.578. The 24-hour low and high are $0.5668 and $0.5831, respectively.
An XRP price prediction signals a bull flag pattern breakout as Ripple considers an IPO and spot XRP ETF approval. The breakout will see a 22% uptrend to $0.69.