Ripple ordered to pay $125 million under final SEC judgment

On August 7, 2024, U.S. District Judge Analisa Torres imposed a $125,035,150 civil penalty on Ripple Labs and permanently enjoined the company from violating Section 5 of the Securities Act of 1933. The Southern District of New York judgment resolved the remedies phase of the Securities and Exchange Commission’s case over Ripple’s institutional sales of XRP, although the parties still retained appellate options.

The result was consequential because it paired a substantial monetary sanction with the rejection of most of the financial relief sought by the SEC. It also preserved the transaction-specific distinctions in the court’s July 13, 2023 summary-judgment decision instead of declaring that XRP, every sale of XRP or crypto tokens generally carried one universal legal classification.

What the court ordered

The August 7 remedies order granted the SEC’s motion in part and denied it in part. Judge Torres found a reasonable probability of future violations and approved a permanent injunction prohibiting Ripple from violating Section 5, the federal provision governing unregistered securities offers and sales.

The court declined, however, to adopt additional SEC language categorically barring unregistered institutional offerings of XRP. Judge Torres found that proposed provision duplicative and too categorical. The distinction mattered because registration requirements, exemptions and the territorial reach of U.S. securities law depend on the facts of a transaction.

The SEC had requested $876,308,712 in disgorgement, $198,150,940 in prejudgment interest and an additional $876,308,712 civil penalty. Together, those three figures totaled $1,950,768,364, calculated directly from the amounts listed in the court’s order.

Judge Torres denied disgorgement and prejudgment interest. Applying binding Second Circuit precedent, the court concluded that the SEC had not established pecuniary harm to institutional buyers. That finding did not erase Ripple’s underlying Section 5 violation; it limited the equitable monetary remedy available on the evidence presented.

How the penalty was calculated

For the civil penalty, the court treated each unlawful institutional transaction as a separate violation because Section 5’s registration obligation is transaction-specific. The SEC suggested that 1,700 contracts were relevant, but Ripple argued that the figure improperly included programmatic sales and other distributions.

Judge Torres independently reviewed Ripple’s expert report and counted 1,278 sales contracts in the institutional category. Applying the applicable maximum first-tier penalty to each contract based on its date produced the $125,035,150 total.

The order expressly described that calculation as an estimate. Its source list of contracts could have been incomplete or overinclusive, and neither party supplied a more precise alternative. The verified figure is therefore the court-imposed penalty, while the 1,278-transaction count carries the limitation acknowledged by the judge.

Why the scope mattered

The remedies decision rested on the July 13, 2023 ruling that Ripple’s institutional XRP sales under written contracts constituted unregistered offers and sales of investment contracts. That ruling reached a different result for Ripple’s programmatic exchange sales and other distributions based on their separate circumstances.

Accordingly, the August 7, 2024 judgment was neither a complete SEC victory nor a blanket exemption for XRP trading. It imposed an enforceable penalty and injunction for established institutional-sale violations while denying approximately $1.075 billion in requested disgorgement and prejudgment interest and reducing the requested civil penalty.

No XRP price, return, trading-volume or market-capitalization claim is made in this reconstruction. Crypto trading is continuous across venues, and attributing a particular market move to the judgment would require a named XRP instrument, venue, currency pair and precisely bounded measurement window. The legally verifiable development on August 7, 2024 was the district court’s judgment; the durability of that judgment remained subject to any subsequent appellate proceedings.