Ripple Claims Victory in SEC Suit But Paid a Price

Jessica Magee, chair of the firm's Securities Enforcement Defense Team, was quoted in a Law360 article about the outcome of the U.S. Securities and Exchange Commission's (SEC) case against Ripple Labs Inc. The SEC sought $2 billion in fines for the exchange's unregistered institutional sales of XRP tokens, but a federal judge reduced the penalties to $125 million. Her decision came after dismissing claims that retail sales of crypto were unregistered securities transactions. The company's CEO highlighted the reduction as a victory, but industry professionals interviewed by Law360 suggested the outcome was more than a slap on the wrist. Ms. Magee noted the ruling wasn't revolutionary but nevertheless contributes to evolving case law surrounding cryptocurrency regulation.

"The court's discretion in making sure the remedies are fit to the facts and circumstances of the case," she said.

Ms. Magee also commented on the $125 million fine, based on calculating penalties for each of the transactions found to have violated securities laws.

"A fair read of a carefully written, thoughtful opinion is that she did take seriously and was not going to blow past the fact that for institutional sales that occurred over a several-year period, Section 5 [of the Securities Act] matters, a duty to register matters," she said. "It sends the message of how much that matters when you do it on a by-violation basis."

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