Ripple’s drawn-out battle with the U.S. Securities and Exchange Commission (SEC) has come to an end after nearly four years. On Aug. 7, District Judge Analisa Torres ruled that Ripple Labs’ institutional sales of its XRP token comprised unregistered securities sales, incurring a roughly $125 million fine. The SEC had requested $876.3 million in disgorgement, $198.1 million in prejudgement interest, and $876.3 million in civil penalties. In justifying the penalty, Judge Torres noted that while Ripple had violated the 1933 Securities Act, the case did not involve allegations of fraud, misappropriation, or other “more culpable conduct,” nor were the SEC able to show that the institutional sales caused substantial losses or the risk thereof to investors. Torres also issued Ripple Labs an injunction, flagging its on-demand liquidity product as flirting with breaching U.S. securities laws. “The Court finds that Ripple’s willingness to push the boundaries of the Order evinces a likelihood that it will eventually (if it has not already) cross the line," Torres said. “The Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction." The SEC first brought charges against Ripple alleging securities law violations in December 2020, before amending its complaint in February 2021. Ripple's XRP token surged in response to the news, currently sitting on an 18% gain over the past 24 hours, according to CoinGecko. Court reaffirms that digital assets aren’t inherently securities Significantly, Judge Torres doubled down on her July 2023 ruling that Ripple’s sales of XRP via cryptocurrency exchanges did not run afoul of U.S. securities laws. The SEC had previously sought to appeal the ruling but was unsuccessful. Crucially, the ruling found that digital assets sold via primary securities investment contracts do not inherently comprise securities assets beyond the context of said primary sales. The ruling undermined the argument underpinning much of the U.S. Securities and Exchange Commission’s controversial campaign of regulation-by-enforcement targeting the crypto industry, and has since been used as precedent informing other legal determinations. The SEC had also filed a complaint against Ripple Labs’ chief executive, Brad Garlinghouse, and co-founder, Chris Larson in December. However, all parties agreed to dismiss the case with prejudice in October 2023 following a settlement.