U.S. Court Rejects Ripple and SEC's Request to Reduce $125 Million Penalty

A U.S. District Court for the Southern District of New York has rejected a joint request from the Securities and Exchange Commission (SEC) and Ripple for an "indicative ruling" aimed at reducing a $125 million civil penalty by 60% and reversing a prior decision that categorized institutional sales of XRP as securities transactions under Section 5 of the Securities Act.

Judge Analisa Torres stated that the court would not reverse its earlier rulings, which were consistent with federal securities laws. She wrote, “Ripple’s willingness to push the boundaries of the [Summary Judgment] Order evinces a likelihood that it will eventually, if it has not already, cross the line. None of this has changed — and the parties hardly pretend that it has.”

The judge emphasized that the proper way to modify or overturn a penalty is through the congressionally mandated appeals process—not by petitioning the lower court directly.

On March 19, Ripple CEO Brad Garlinghouse announced the SEC had dropped its appeal, calling it a “resounding victory” for Ripple and the crypto industry. As part of winding down the case, both parties filed a motion to release $125 million in escrow. Under the proposal, $50 million would be paid to the SEC as a discounted penalty, while $75 million would be returned to Ripple—pending court approval.

#Ripple #SEC #XRP #CryptoLaw #DigitalAssets