SEC and Ripple Settle XRP Lawsuit, Ending Five-Year Legal Dispute

The nearly five-year legal dispute between the SEC and Ripple Labs has officially ended with both parties dismissing appeals in the US Court of Appeals for the Second Circuit. Ripple will pay $50M, with $75M of escrowed funds returned. XRP's programmatic sales remain classified as non-securities. The decision clears the way for $125M held in escrow to be disbursed. XRP rose 12% following the news.

The U.S. Securities and Exchange Commission (SEC) and Ripple Labs have officially ended their nearly five-year legal dispute over XRP. In a joint filing with the U.S. Court of Appeals for the Second Circuit, both parties agreed to dismiss their respective appeals, effectively concluding one of the most closely watched cases in the digital asset industry [1][2][3][4].

The dismissal comes after years of legal wrangling and multiple partial rulings. The case began in December 2020 when the SEC sued Ripple Labs and its top executives, alleging that they conducted unregistered securities offerings through the sale of XRP. Ripple maintained that XRP is a digital currency, not a security [1][2].

In July 2023, Judge Analisa Torres of the Southern District of New York issued a split decision. The judge ruled that XRP sales on public exchanges did not qualify as securities transactions, a partial victory for Ripple. However, the court allowed the case to continue on other grounds, particularly concerning institutional sales of XRP [1][2].

Under the dismissal, the SEC withdrew its appeal of the 2023 ruling, and Ripple dropped its cross-appeal. Each side will bear its legal costs. The decision clears the way for $125 million held in escrow since June to be disbursed, with $50 million going to the U.S. Treasury as a penalty and $75 million returned to Ripple [3].

Following the news, XRP rose 12%, with 24-hour trading volume reaching $9.54 billion, up nearly 140% from the previous day, reflecting renewed market interest in the token [3].

The formal end of the case marks a milestone moment not just for Ripple but also for XRP holders and the broader digital asset industry. The litigation's outcome had implications for token classification and enforcement actions across the sector. Responding to the news, Ripple's Chief Legal Officer Stuart Alderoty stated, "The end... and now back to business" [3].

The SEC's decision to drop the case follows a series of enforcement retreats against crypto companies, including Coinbase and Kraken, reflecting a softer stance by the agency under incoming chair Paul Atkins [3].

References:
[1] https://www.coindesk.com/policy/2025/08/07/sec-s-long-running-case-against-ripple-officially-over
[2] https://bitcoinist.com/ripple-vs-sec-the-historic-legal-battle-ends/
[3] https://crypto.news/xrp-soars-ripple-sec-end-legal-dispute-2025/
[4] https://timestabloid.com/big-news-for-xrp-sec-and-ripple-jointly-dismiss-appeals-the-case-is-over/