In a significant development for both Ripple and the cryptocurrency sector, it has been announced that the U.S. Securities and Exchange Commission (SEC) will settle its multi-year legal battle with Ripple Labs for $50 million. This agreement comes just under two months after Ripple CEO Brad Garlinghouse disclosed that the SEC had ceased its appeal against the company.
Filed with the court on May 8, the settlement marks a pivotal resolution to a case that has been a source of uncertainty for Ripple and the broader crypto landscape. A detailed joint court filing outlines the key terms of the agreement, including a request to dissolve an existing injunction against Ripple and the release of $125 million held in escrow.
Key Terms of the Deal
Under the newly established terms, Ripple will pay the SEC $50 million—significantly less than the original fine of $125 million imposed on the firm. The settlement will also result in the return of the remaining $75 million to Ripple. Both parties have agreed to withdraw their respective appeals, culminating in a mutual dismissal that seeks to resolve the disputes amicably.
The tumultuous journey began in December 2020 when the SEC filed a lawsuit against Ripple and its key executives, Chris Larsen and Brad Garlinghouse, claiming that they had raised over $1.3 billion through an unregistered securities offering involving Ripple’s native XRP token. Ripple has consistently maintained that its practices were in compliance with regulatory standards, igniting a prolonged legal battle.
In a landmark ruling in July 2023, Judge Analisa Torres determined that XRP was not a security when sold to retail investors; notably, it qualified as a security in institutional sales. This ruling resulted in Ripple incurring a $125 million fine for previous unregistered securities sales. However, the situation escalated further when the SEC appealed this ruling in January 2025, complicating the legal landscape even further.
Changes within the SEC, including the departure of Chair Gary Gensler, paved the way for speculation that the agency might drop its appeal. Although no formal announcement was made, reports indicated a shift in the SEC’s approach to the case.
Next Steps in the Process
As the process unfolds, attorney James K. Filan indicates that Judge Torres must first issue an indicative ruling to approve the proposed settlement terms. If this occurs, Ripple and the SEC will seek a limited remand from the Second Circuit Court of Appeals to formally proceed with the agreement.
Once authorized, the injunction against Ripple will be lifted, the funds in escrow will be released, and both parties will officially dismiss their respective appeals, signaling an end to this protracted legal saga.
The announcement of the settlement has sparked immediate responses across the cryptocurrency ecosystem, quite notably with XRP’s price experiencing a 5.2% surge to $2.29 within 24 hours. While this increase is slightly below the broader crypto market’s 7% weekly gain, XRP continues to show remarkable performance with a reported 340% uptick over the past year.
The XRP community has expressed enthusiasm regarding the settlement, with attorney John E. Deaton aptly summarizing the collective sentiment on social media: “It’s over.” The resolution of this case not only signifies relief for Ripple but also sends a message about the evolving regulatory landscape in the cryptocurrency domain.
The full details can be found in the original article published on CryptoPotato.
