The U.S. Southern District Court of New York rejected the joint civil penalty reduction request by Ripple (XRP) and the U.S. Securities and Exchange Commission (SEC). Both parties requested to overturn the existing ruling that viewed XRP institutional investor sales as securities transactions and reduce the imposed fine of $125 million (approximately 173.9 billion won) by 60%, but their request was not accepted.
This ruling was the result of a request for an 'indicative ruling' that would allow the lower court to make a judgment, subject to approval from the higher appellate court. However, Judge Analisa Torres, who heard the lawsuit, firmly maintained the existing ruling. According to court-submitted documents, the judge noted that "Ripple's attitude of trying to go beyond the scope of the summary judgment suggests that it has either already or may have crossed legal boundaries" and that "these circumstances have not changed, and neither party claims any significant changes".
She further stated, "Both parties now argue that civil penalties should be reduced by 60% for public interest reasons and the prohibition order issued last year should be invalidated. However, this cannot bypass the appeal procedure established by Congress, and the lower court does not have the authority to directly overturn the decision".
Previously, the SEC had filed a lawsuit against Ripple, claiming violation of Section 5 of securities law during XRP sales to institutional investors, and the court had approved civil penalties and a prohibition order. While Ripple partially acknowledged the ruling and sought a mutually agreed penalty reduction, arguing the excessiveness of the fine, this decision means they failed to find a legal breakthrough.
This ruling is considered a significant milestone in the prolonged legal battle surrounding XRP. Attention is focused on whether this might curb the SEC's regulatory actions targeting the cryptocurrency industry. However, analysts also note that Judge Torres' decision remains consistent with existing regulatory logic by adhering to securities law principles.
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