Ripple SEC Settlement Proposal Unlocks $125 Million Funds

Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have submitted a joint settlement proposal to the court, marking a significant development in their prolonged legal battle. The proposal aims to avoid further appeals and delays, with Ripple set to unlock $125 million in previously locked funds. Of this amount, $50 million will be paid to the SEC as a civil penalty, while the remaining $75 million will be returned to Ripple. Legal experts, including attorney John Deaton, estimate a 70% likelihood of the settlement being approved by the court.

John Deaton, a prominent legal figure in the case, has critiqued the settlement proposal, arguing that the SEC should take accountability for its past approach towards the crypto sector. Deaton expressed surprise at the lack of acknowledgment from the SEC regarding its previously "arbitrary and capricious" strict approach. He highlighted past court rulings, such as the Debt Box case, where SEC attorneys faced sanctions, and the Ripple case, where Judge Netburn ruled that the SEC did not show "faithful adherence to the law." Deaton also pointed out the necessity of addressing the upcoming Clarity Act and Genius Act in the presentations, emphasizing the need for stronger arguments to bring clarity to the industry and reverse Judge Torres’s current ruling.

Attorney Fred Rispoli questioned the practical impact of the injunction, wondering about its true purpose if the SEC could easily grant an exemption to Ripple. This raises doubts about the injunction’s real deterrent effect. Former SEC official Marc Fagel also criticized the SEC’s recent presentation, noting that the emphasis on choices and policy changes did not provide a strong legal justification. This suggests that the SEC needs to rely on more solid legal foundations when defending the settlement. Meanwhile, attorney Bill Morgan noted that the joint Ripple-SEC submission did not become more convincing with more readings, although he predicted Judge Torres would likely approve the proposal. Morgan foresaw a general desire for the lawsuit’s conclusion taking precedence over the presentation’s content.