XRP price dips 3% to $2.41 as a US District Judge Analisa Torres overrule Ripple $125M settlement fine against Ripple.

Ripple (XRP) slipped by 3% on Friday, trading as low as $2.37 following a negative legal development that reignited concerns over regulatory uncertainty.

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Recently, Judge Analisa Torres of the U.S. District Court for the Southern District of New York made a noteworthy decision in overruling the $125 million settlement fine levied on Ripple.

This development unfolded as part of the ongoing case brought by the Securities and Exchange Commission (SEC) against Ripple. The SEC is pursuing claims that the cryptocurrency firm engaged in an unregistered offering of securities.

In a prior ruling, Judge Torres had partially sided with the SEC’s assertions that Ripple’s sales of XRP to institutional investors constituted investment contracts, thereby classifying them as securities.

However, the judge disagreed with the SEC’s stance on Ripple’s programmatic token sales. Despite this ruling, Judge Torres shot down a proposed $50 million settlement that the two parties had reached in April.

The SEC's case against Ripple began in December 2020 with the agency’s allegations that Ripple had sold billions of XRP to raise funds without registering its offerings with the SEC.

The SEC's complaint focused on two main types of XRP sales: "institutional sales," in which Ripple sold XRP to large investors, and "programmatic sales," where Ripple sold XRP in smaller amounts to a broader range of investors through a computer program.

In March 2023, Judge Analisa Torres ruled partly in favor of the SEC, deciding that the institutional sales of XRP were indeed part of an investment contract and should be classified as securities.

On the other hand, the judge disagreed with the SEC regarding the programmatic sales of XRP, stating that they were not sold in a manner that would classify them as securities.

After months of back-and-forth, the two sides reached a surprising $50 million settlement agreement in April.

This proposed settlement would have seen the SEC drop its case against Ripple in exchange for the cryptocurrency firm paying a penalty of $50 million and an injunction on future securities violations. However, Judge Torres ultimately rejected the settlement, stating that she "cannot approve" the settlement in its present form.

The judge's decision to reject the settlement is a significant setback for both the SEC and Ripple.

The SEC will now have to decide whether to continue pursuing its case against Ripple in its entirety or to try and negotiate a new settlement agreement.

Meanwhile, Ripple will be forced to continue defending itself against the SEC's claims, which could ultimately lead to a full trial of the case.

This case has far-reaching implications for the cryptocurrency industry. If the SEC wins its case against Ripple, it could deter other cryptocurrency firms from raising funds in the U.S. without registering their offerings with the SEC.

This could make it more difficult for cryptocurrency firms to access the capital they need to grow their businesses.

On the other hand, if Ripple prevails in this case, it could deter the SEC from bringing cases against cryptocurrency firms for selling digital assets that are not classified as securities.

This could create more legal certainty for the cryptocurrency industry and encourage greater investment in the sector.

The coming days and weeks will be crucial in determining the next chapter of this case and its broader impact on the cryptocurrency landscape.