Ripple has been ordered by a US judge to pay the Securities and Exchange Commission $125 million in penalties for improperly selling its XRP token to institutional investors.
Despite the penalty, CEO Brad Garlinghouse has claimed the ruling is a victory for Ripple, noting that the SEC had asked for $2 billion in penalties.
The SEC filed suit against Ripple, Garlinghouse and co-founder Christian Larsen in 2020, alleging that they "raised over $1.3 billion through an unregistered, ongoing digital asset securities offering".
Last year, in what was widely viewed as a major win for the cryptocurrency industry, US district judge Analisa Torres ruled that Ripple did not violate federal securities law by selling the XRP token on public exchanges and through algorithms,
However, Torres also ruled that institutional sale of XRP did violate federal securities law, prompting the $125 million fine.
In a post on X, Garlinghouse says: "The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.
"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."