The price of XRP soared by 26% as a federal judge in New York moved closer to concluding a three-year securities lawsuit against Ripple Labs, a development that the company’s executives hailed as a “victory” for the industry.
On August 7, a federal judge ordered Ripple Labs to pay a civil penalty of $125 million and stated that the company was “restrained and permanently enjoined” from violating U.S. securities laws as part of the lawsuit initiated by the Securities and Exchange Commission (SEC).
This ruling appears to have brought Ripple’s case with the SEC to its final stages since the regulatory body first filed the lawsuit in December 2020.
Following the news, XRP surged by 26% to $0.63, recouping much of the losses from the broader cryptocurrency downturn since August 5, according to CoinMarketCap data.
At the time of publication, XRP was trading at $0.59. Ripple Labs CEO Brad Garlinghouse declared in a post on X shortly after, “This is a victory for Ripple, the industry, and the law. The SEC’s obstacles to the entire XRP community have vanished.”
The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand. We respect the Court’s decision and have clarity to continue growing our company.
This is a victory for Ripple, the industry and the rule of law. The SEC’s…
— Brad Garlinghouse (@bgarlinghouse) August 7, 2024
“The SEC’s uncontrolled campaign against us has finally ended. Let’s hope this marks the end of this Administration’s war on cryptocurrency,” added Ripple Labs co-founder Chris Larsen in a post on X.
However, other cryptocurrency commentators also focused on XRP’s price volatility following the decision.
“Overall, this is a HUGE win for Ripple. Although I’m surprised by the $125 million penalty, Ripple earned much more than that from XRP’s price movement in the last five minutes,” wrote crypto attorney and Hodl Law founder Fred Rispoli in an August 7 post on X.
“XRP IS READY TO SOAR. NO MORE HOLDING IT BACK! NO MORE PRICE SUPPRESSION! THE LAWSUIT IS OVER!!” exclaimed crypto researcher Ripple Van Winkle to their 108,400 followers.
The SEC wanted $2 Billion
They will get $125 million and they can no longer come at @Ripple or #XRP for securities law
Word on the street is @GaryGensler is acting like this was a victory
— Ripple Van Winkle | Crypto Researcher 🚀🚨 (@RipBullWinkle) August 7, 2024
The unexpected price surge caught futures traders off guard, wiping out 40% of short positions compared to long positions in just four hours.
According to CoinGlass data, $5.4 million worth of short positions were liquidated following the price spike. If the upward trend continues and the price hits $0.65, an additional $20 million in short positions could be liquidated.
Great news from Ripple. It’s been a long time coming.
Institutions will really benefit byreducing costs, significantly increasing their iquidity and reducing their risk. Can’t wait to see this settled.