Ripple Ordered to Pay $125 Million Penalty for Improper Sale of XRP Tokens, Reuters Reports

A Manhattan court judge has ordered Ripple Labs to pay approximately $125 million in penalties to the U.S. Securities and Exchange Commission (SEC) due to allegations of improperly selling the cryptocurrency XRP.

The SEC had initially been seeking fines and penalties amounting to $2 billion in its legal action against Ripple Labs, as stated by the company’s chief legal officer, Stuart Alderoty, in March. The recent penalty represents only a small fraction of that total.

The SEC’s original lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen began in 2020, accusing them of illegally generating over $1.3 billion through an unregistered securities offering involving the sale of XRP. In October, the SEC dropped its remaining claims against Garlinghouse and Larsen, making this case particularly significant as one of the largest in the cryptocurrency sector.

In response to the ruling, Ripple CEO Brad Garlinghouse expressed respect for the court’s decision and emphasized the clarity it provides for the company’s growth. A spokesperson for the SEC remarked that the ruling reinforces the application of securities laws when firms offer and sell investment contracts, irrespective of the technology or labels used.