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ARTICLE · 13 AUGUST 2024

Court Denies SEC's Request For Disgorgement In Ripple Case

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In a setback to the Securities and Exchange Commission's (SEC) crypto enforcement efforts, a federal court has denied the agency's request for disgorgement of profits in its case against Ripple Labs.

United StatesTechnology
Daniel J. Davis
Daniel J. Davis
Alexander C. Kim
Alexander C. Kim
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In a setback to the Securities and Exchange Commission's (SEC) crypto enforcement efforts, a federal court has denied the agency's request for disgorgement of profits in its case against Ripple Labs. The ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York on August 7, deals a blow to the SEC's strategy of seeking large disgorgement penalties in cases based solely on registration violations.

The court's decision stems from the SEC's enforcement action against Ripple, which alleged that the company's sales of XRP tokens constituted unregistered securities offerings. While Judge Torres previously ruled that some of Ripple's XRP sales to institutional buyers should have been registered under the securities laws,1 she has now rejected the SEC's bid to disgorge $876 million in profits from those sales.

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