The years-long lawsuit launched against XRP’s (XRP-USD) parent company, Ripple Labs, has now seemingly concluded. A ruling from a Manhattan judge that Ripple has been ordered to pay $125 million in penalties to settle this long-standing case around the company’s sales of its XRP token is being cheered by investors for a number of reasons.
For one, this penalty is much lower than the sums the Securities and Exchange Commission (SEC) previously asked for and what many investors expected would be the case. Accordingly, there’s a win in this loss, so to speak, from a monetary standpoint.
Secondly, with this case closed and once the fine is paid, the headwinds surrounding XRP relating to this lawsuit (which was filed back in late 2020) will be gone. That means greener pastures ahead, or at least that’s the take many bulls have on this ruling today.
Let’s dive more into what was announced and why XRP is surging on this news today.
XRP Rockets Higher on $125 Million Penalty
It’s important to realize the ultimate victory of this $125 million court-ordered penalty for the Ripple Labs team and what it means for XRP investors. To put this into perspective, the SEC had previously sought fines of $2 billion from Ripple due to what the regulator saw as improper sales of securities with the project’s initial coin launch.
Of course, Ripple Labs argued that XRP is not a security. And despite asking for regulatory clarity on the topic, the SEC hasn’t provided it. Indeed, this fine, which is 1/16th of the size it could have been, suggests the judge here sided with Ripple much more than the regulators without fully absolving them of wrongdoing. There’s still the chance that the SEC might appeal the ruling, but for now, it is a win for Ripple.
For crypto investors, this is perhaps the best outcome. It not only removes the legal baggage that has dragged this crypto asset lower for years but also allows investors to focus on Ripple’s plans for growth moving forward and begin to price positive catalysts accordingly. I’m not surprised to see XRP more than 20% higher on this news. If anything, I think this surge is quite muted, given the long-awaited news investors have eagerly been awaiting.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
