Ripple CEO Brad Garlinghouse said Judge Analisa Torres's order for Ripple to pay a smaller penalty to the U.S. Securities and Exchange Commission (SEC) than what the SEC had requested is a "victory" for the company and for the crypto industry. Garlinghouse shared his statement in an Aug. 7 post on X.

"The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand," said Garlinghouse. "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 headwinds against the whole of the XRP community are gone."

According to Investopedia, Ripple's legal battle with the SEC began in 2020 when the SEC accused the company of conducting an unregistered securities offering through the token XRP. In July 2023, the U.S. Southern District Court of New York determined that XRP was a security when sold to institutional investors but not when sold on an exchange to members of the general public.

Ripple CEO Brad Garlinghouse (left) and Chief Legal Officer Stuart Alderoty (right) | X/bgarlinghouse, X/s_alderoty

Last week, Judge Torres ordered Ripple to pay a $125 million penalty to the SEC, according to Investopedia. The SEC was seeking a $2 billion penalty. Torres also rejected the SEC's request for disgorgement, saying that the SEC failed to demonstrate "pecuniary harm" that would have justified the disgorgement. The price of XRP spiked after the judge's ruling. The SEC could appeal the ruling.

The judge rejected "the SEC’s suggestion that Ripple acted recklessly and she reminds the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm," Ripple Chief Legal Officer Stuart Alderoty said in a post on X. "We respect the $125M fine the Court has imposed for certain historic sales to sophisticated third parties."

The Digital Chamber, a blockchain industry advocacy group, said in a statement on its website that the small size of the penalty Ripple was ordered to pay compared to the size of the penalty the SEC sought "highlights the flaws in the SEC’s regulation by enforcement approach." The Chamber said that while the ruling "brings some clarity" to the crypto industry, it also "underscores the urgent need for Congress to pass comprehensive market structure legislation."

Before joining Ripple, Garlinghouse was CEO of Hightail, president of consumer applications at AOL, and senior vice president at Yahoo, according to World Economic Forum. He also held various positions at Dialpad Communications and SBC Communications. He is a board member of Animoto and OutMatch.