XRP News Today: Ripple Drops Appeal Accepts $125 Million Fine Ends 5-Year SEC Battle

Ripple Labs has decided to withdraw its cross-appeal in the ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). This move signals a potential end to the nearly five-year-long dispute over the classification of XRP tokens. The SEC is also expected to withdraw its own appeal, marking a significant milestone in the regulatory landscape of digital assets in the United States.

Ripple's decision to drop its appeal comes after U.S. District Judge Analisa Torres rejected a joint motion by Ripple and the SEC. This motion aimed to reduce Ripple’s civil penalty from $125 million to $50 million and eliminate the permanent injunction previously imposed by the court. Judge Torres was not convinced by the attempt to dissolve the injunction, stating that Ripple had not demonstrated a change in circumstances since the injunction was first issued. She emphasized that the court had found a "reasonable probability" that Ripple would continue violating federal securities laws, and this assessment had not changed.

With this rejection, Ripple faced two options: continue with an appeal against the court’s ruling on institutional sales or accept the penalty and move forward. CEO Brad Garlinghouse confirmed on X (formerly Twitter) that the company has chosen the latter, stating, “We’re closing this chapter once and for all.”

By dropping its appeal, Ripple has accepted the $125 million fine originally imposed by the court, which is significantly less than the SEC’s initial demand of $2 billion. Ripple had earlier argued that the outcome represented a 94% reduction in potential penalties and thus a win for the company. More importantly, Ripple will continue operating under a permanent injunction, which requires it to comply with securities laws in future institutional sales of XRP. However, XRP’s non-security status in secondary market transactions remains intact, a key victory for the crypto industry and token holders.

Chief Legal Officer Stuart Alderoty explained the company’s rationale, stating, “The Court gave us two options: dismiss our appeal challenging the finding on historic institutional sales—or press forward. Either way, XRP’s legal status as not a security remains unchanged. In the meantime, it’s business as usual.” Garlinghouse echoed this sentiment, signaling a return to core business activities. “Our focus now is on building the Internet of Value,” he said, referencing Ripple’s long-standing mission to use blockchain to power global money transfers.

The legal saga began in December 2020 when the SEC, under then-chair Jay Clayton, accused Ripple of an unregistered securities offering because it sold $1.3 billion of XRP. The case listed Brad Garlinghouse, the CEO, and Chris Larsen, the executive chairman, as defendants. In July 2023, Judge Torres granted a partial summary judgment, determining that XRP sales on public exchanges were not securities transactions. However, she ruled that XRP sales to institutional investors were in violation of securities laws, leading to the current civil penalty and injunction.

This decision provided significant clarification around the legal status of XRP and influenced other projects in how they structured token sales and distributions. The decision was broadly seen by market observers as a net win for the crypto industry, especially for projects involved in retail token sales. The SEC’s expected withdrawal from its own appeal removes the final legal hurdle in the case. The permanent injunction, however, continues in place for Ripple’s institutional sales, but the company has indicated that it is able to live under those conditions while growing its global network of payments.

This resolution might also have wider significance for the future direction of the SEC’s enforcement efforts, especially as the agency hunts for cases against numerous other crypto firms. The Ripple case represented one of the earliest and biggest clashes between regulators and blockchain companies over how courts would view the application of securities laws in the digital asset industry.