XRP Outshines Bitcoin, Ethereum To Become Biggest Daily Gainer After Judge Imposes $125M Penalty, Bans Future Securities Law Violations In SEC Case

Payment-focused cryptocurrency XRP XRP/USD soared 15% Wednesday after Ripple Labs was handed a $125 million fine by a federal judge, a penalty far less than the $1.9 billion that the SEC had sought.

What Happened: In a major development in the three-and-a-half-year-old legal battle, District Judge Analisa Torres of the Southern District of New York imposed the fine and an injunction against future securities law violations on Ripple, according to a CoinDesk report.

The judge’s order follows her ruling last year that Ripple violated federal securities laws through its direct sale of XRP to institutional clients. However, she also ruled that Ripple’s programmatic sales of XRP to retail clients through exchanges did not violate any securities laws.

Judge Torres also banned Ripple from future violations of federal securities laws. She stated that while she isn’t making a judgement that Ripple has violated any laws after the SEC filed its lawsuit, the company may well “cross the line” in a section referring to Ripple’s “on demand liquidity” offerings.

In response, XRP, the cryptocurrency used by Ripple Labs for their product offerings, spiked 15.53%, emerging as the market’s biggest gainer during the day. The rally came at a time when Bitcoin BTC/USD and Ethereum ETH/USD trended downward.

XRP’s trading volume also exploded 171% to $4.5 billion in the last 24 hours.

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Why It Matters: Ripple had been pushing back against the hefty fine proposed by the SEC. In April 2024, Ripple had argued against the SEC’s request for a nearly $2 billion penalty, instead proposing a civil penalty of just $10 million.

With the recent ruling, the imposed fine is significantly lower than what the SEC had initially sought, which could be a factor in the recent surge in XRP’s price. The ongoing legal proceedings and their outcomes continue to have a significant impact on the cryptocurrency market.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.