Welcome back to The Breakdown with me, NLW.

It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.

What's going on, guys? It is Thursday, August 8th, and today we are talking about the final decision in the long-running ripple case.

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Well, friends, after almost four years in court, the SEC's lawsuit against Ripple is finally resolved.

The judge has ordered Ripple Labs to pay a $125 million civil penalty and prohibited them from

further breaches of securities law. The ruling is being hailed as a victory for Ripple as the

SEC had argued for a

company-ending fine of $2 billion. From the beginning, this case has had major implications for the

industry. It helped define the borders of how securities law would apply to crypto assets in the

absence of SEC rulemaking. This ruling only dealt with penalties, with substantive legal issues

decided in a July 2023 decision. That order

found that direct token sales to institutional investors were covered by existing securities law.

Ripple had failed to obtain the relevant SEC exemptions before conducting these sales.

However, the judge also found that secondary market token sales on the open market were not

subject to securities law. This led to the conclusion that the tokens themselves are not

securities. There were also further issues related to Ripple executives aiding and abetting this

illegal conduct. Those claims were set to go to a full trial, but have since been dropped by the

SEC. In deciding on the appropriate penalty, the court found that there were 1,278 transactions

that violated securities law. The judge justified a much smaller penalty than the

SEC had asked for because the case, quote, does not involve allegations of fraud, misappropriation,

...