According to court documents, a Manhattan judge ordered Labs to pay a penalty of about $125 million to the U.S. Securities and Exchange Commission (SEC) over allegations that it illegally sold the cryptocurrency XRP.

The amount is significantly lower than the $2 billion in fines and penalties that U.S. regulators had originally sought in a protracted legal battle with the cryptocurrency firm.

Following this news, the XRP token surged by around 20% to $0.6165.

The Securities and Exchange Commission (SEC) sued Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in 2020, alleging that they illegally raised more than $1.3 billion in an unregistered securities offering of XRP.

However, the regulator dropped the remaining claims against Garlinghouse and Larsen in October. The case has been closely watched because it is one of the largest cases brought by the SEC in the cryptocurrency sector.

“We respect the court’s decision and have the clarity to continue growing our business,” Ripple CEO Brad Garlinghouse said in a post on X.

He noted that the court reduced the SEC’s request by about 94%, “finding they overreached.” Garlinghouse described the outcome as “a victory for Ripple, the industry, and the rule of law,” adding that “the SEC’s headwinds against the entire XRP community have passed.”

In a ruling Wednesday, District Judge Analisa Torres said there were no allegations of fraud in the case.

Despite the gains, the XRP token remains relatively unchanged this year. The ruling comes at a time when digital currencies have lost value amid the current global risk aversion in the market.

Judge Torres previously ruled that XRP is only subject to securities law when sold to institutional investors, a ruling that was seen as a significant victory for the industry. The SEC continues to pursue several high-profile cases against cryptocurrency exchanges and issuers, accusing them of offering unregistered securities.