Ripple Drops Cross-Appeal, Agrees to $50M SEC Penalty

Ripple Labs, a prominent blockchain firm, has announced a significant development in its long-running legal dispute with the US Securities and Exchange Commission (SEC). After more than four years of litigation, Ripple has decided to drop its cross-appeal in the case, subject to court approval. This move signals a potential end to the protracted legal battle between the two entities.

According to a statement from Ripple's chief legal officer, Stuart Alderoty, the firm will withdraw its cross-appeal in the US Court of Appeals for the Second Circuit. This decision follows an August 2024 judgment from the US District Court for the Southern District of New York, which held Ripple liable for $125 million. Under the new agreement, the SEC will retain only $50 million of this amount, with the remaining $75 million to be refunded to Ripple.

Alderoty also noted that the SEC will request the court to lift the standard injunction that was previously imposed at the agency's request. This request is part of the broader settlement process, which is subject to the SEC's internal vote, the drafting of final documents, and the usual court procedures.

The announcement by Alderoty came just days after Ripple CEO Brad Garlinghouse stated that the SEC would drop its appeal over the August 2024 judgment. This development suggests a mutual agreement between the two parties to resolve the case, although no new filings have been made in the Second Circuit since January 31.

The decision to drop the cross-appeal and seek a refund is a strategic move by Ripple, aimed at bringing an end to the protracted legal battle. By agreeing to the terms set by the SEC, Ripple can avoid further legal expenses and focus on its core business operations. The refund of $75 million will also provide the company with much-needed financial relief, allowing it to invest in growth and innovation.

The resolution of this case is significant for the broader cryptocurrency industry, as it sets a precedent for how regulatory bodies and blockchain firms can navigate legal disputes. The outcome may influence future regulatory frameworks and compliance standards, potentially fostering a more stable and predictable environment for digital assets.

As the case progresses through the final stages of court approval, both Ripple and the SEC will be closely monitored by industry stakeholders. The resolution of this high-profile legal battle could have far-reaching implications for the future of cryptocurrency regulation and the operations of blockchain firms.