XRP News Today: SEC Commissioner Criticizes Ripple Settlement, Warns of Regulatory Vacuum

The US Securities and Exchange Commission (SEC) has faced criticism from its own Commissioner, Caroline Crenshaw, over a proposed settlement with Ripple. The settlement, if approved, would dissolve an August 2024 injunction against Ripple and return $75 million of the $125 million in civil penalties held in escrow to the crypto firm. Crenshaw argues that this settlement, along with the gradual dismantling of the SEC’s crypto enforcement program, undermines the agency's credibility and the court’s role in interpreting securities laws. She warns that accepting the settlement could create a "regulatory vacuum" until a new framework is established, leaving investors and markets vulnerable.

Crenshaw's concerns stem from the SEC's shifting stance on crypto regulation under different administrations. The agency, which had taken a hardline approach under former Chair Gary Gensler, has been walking back its enforcement actions against crypto firms. This change in strategy, according to Crenshaw, erodes the credibility of SEC lawyers and leaves the investing public without adequate protection.

The legal saga between the SEC and Ripple began in December 2020 when the SEC accused Ripple Labs of illegally selling its XRP token as an unregistered security. A judge ruled in August last year that Ripple's XRP token was covered by securities laws when sold to institutional investors, ordering the firm to pay $125 million in penalties. Despite the proposed settlement, the case is not yet concluded. Judge Torres must first provide an indicative ruling on the settlement letter. If approved, the SEC and Ripple will seek a limited remand from the Second Circuit Court of Appeals, followed by a motion for the agreed settlement. Only after these steps and the distribution of funds will the SEC and Ripple request the dismissal of the SEC’s appeal and Ripple’s cross-appeal, finally concluding the legal battle.