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ARTICLE · 05 SEPTEMBER 2024

Court Denies SEC's Request For Disgorgement In Ripple Case: Implications For Crypto Enforcement

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In a notable development for the cryptocurrency regulatory landscape, a federal court has recently denied the Securities and Exchange Commission's (SEC) request for disgorgement of profits in its case against Ripple Labs.

United StatesTechnology

In a notable development for the cryptocurrency regulatory landscape, a federal court has recently denied the Securities and Exchange Commission's (SEC) request for disgorgement of profits in its case against Ripple Labs. This ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York on August 7, 2024, marks a significant setback for the SEC's efforts to impose substantial financial penalties in crypto cases primarily based on registration violations.

The Case Background

The SEC's enforcement action against Ripple Labs revolved around the allegation that the company's sales of XRP tokens constituted unregistered securities offerings. Judge Torres had previously ruled that some of Ripple's XRP sales to institutional buyers should have been registered under the securities laws. However, in a pivotal move, she rejected the SEC's request to disgorge $876 million in profits from these sales.

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