XRP News Today: Ripple Ends Legal Battle With SEC, Pays $125 Million Penalty

Ripple Labs, Inc. and the U.S. Securities and Exchange Commission (SEC) have decided to drop their appeals, bringing their lengthy legal battle to an end. This resolution marks a significant shift in regulatory approaches within the U.S. crypto industry, with Ripple ceasing its legal disputes and paying a civil penalty. The decision to drop the appeals was announced by Ripple CEO Brad Garlinghouse, who stated that the company is focusing on building the "Internet of Value." The legal battle, which began in December 2020, involved allegations that Ripple conducted a $1.3 billion unregistered securities offering through the sale of its cryptocurrency, XRP.

The legal dispute began in December 2020 when the SEC filed a lawsuit against Ripple, alleging that the company had conducted an unregistered securities offering. The case involved Ripple’s sales of the XRP token, with a significant ruling in July 2023 stating that while Ripple’s sales of XRP on public exchanges did not meet the legal definition of a security, its sales to institutional investors should have complied with securities laws. This ruling was a pivotal moment in the case, as it provided a mixed classification for XRP under U.S. law.

In August 2024, a judge ordered Ripple to pay a civil penalty of $125 million, a figure significantly lower than the $2 billion sought by the SEC. The SEC initially indicated it would appeal this ruling, but the decision by Ripple to drop its cross-appeal suggests a potential end to the legal standoff. The SEC is expected to follow suit and drop its appeal, finalizing the conclusion of the legal battle. The judge's rejection of a joint motion by Ripple and the SEC to approve their proposed settlement was a significant setback. The judge stated that the two parties had “not come close” to showing that the settlement was justified. The judge's ruling emphasized that the parties did not have the authority to agree not to be bound by a court’s final judgment that a party violated an Act of Congress in such a manner that a permanent injunction and a civil penalty were necessary to prevent that party from violating the law again.

Ripple CEO Brad Garlinghouse had previously stated that the SEC had dropped its case against the blockchain company, describing the move as “a resounding victory for Ripple, for crypto, every way you look at it.” This statement underscores the significance of the legal battle for the broader cryptocurrency industry, as the outcome could set precedents for future regulatory actions. The conclusion of this legal dispute marks a significant milestone for Ripple and the cryptocurrency industry as a whole. The mixed classification of XRP under U.S. law provides clarity on the regulatory treatment of cryptocurrencies, which could influence future regulatory frameworks and industry practices. As Ripple moves forward, the company can focus on its core business activities, including the development and promotion of its blockchain technology and cryptocurrency solutions.

Industry experts acknowledge the practical conclusion but note required court actions for formal dismissal. The outcome may shape both regulatory frameworks and market strategies in the U.S. As the dust settles on this case, Ripple’s endeavor to enhance digital asset development could gain momentum, impacting similar entities under regulatory scrutiny. The announcement had immediate effects on XRP, which saw a brief price increase. Financially, Ripple agreed to pay a civil penalty of $125 million, a far cry from the SEC’s initial demand. This resolution may influence future regulatory strategies for crypto, especially concerning sales to institutional versus public markets. The abrupt end to the appeals indicates a move away from stringent legal battles.