Ripple Settles With SEC For $50 Million, Ends Legal Battle

Ripple has reached a final settlement with the U.S. Securities and Exchange Commission (SEC), concluding a lengthy legal battle that began in December 2020. The settlement involves Ripple paying a reduced penalty of $50 million, down from the originally ordered $125 million. This agreement comes after both parties agreed to drop their respective appeals, marking a significant step towards resolving the dispute.

The settlement includes Ripple withdrawing its cross-appeal, while the SEC will request that Judge Analisa Torres lift the injunction that had prevented Ripple from selling XRP to institutional investors. The SEC will retain $50 million of the $125 million fine, which was already held in an interest-bearing escrow account, with the remaining $75 million to be returned to Ripple.

Ripple’s Chief Legal Officer, Stuart Alderoty, confirmed the agreement, describing it as the final step in resolving the case. He stated that the SEC will keep $50 million of the $125 million fine, with the balance returned to Ripple. Alderoty also hinted that once the SEC Commission votes and the necessary court documentation is filed, the case will be officially closed.

The legal battle, which was in an appeal phase, saw Judge Analisa Torres rule that while XRP sales to retail investors on exchanges did not violate securities laws, institutional sales did meet the criteria for investment contracts under the Howey Test. This partial ruling was significant for the broader crypto market, as it clarified that not all digital asset sales automatically qualify as securities transactions.

Ripple’s CEO, Brad Garlinghouse, confirmed that the regulator has dropped its appeal, marking a decisive win for the company and the broader crypto industry. Garlinghouse had previously announced that the SEC would not continue its appeal, paving the way for Ripple to follow suit. He also opened up about the financial harm caused by the lawsuit, saying that the legal proceedings had potentially wiped out up to $15 billion in value for XRP holders. He criticized SEC Chairman Gary Gensler’s aggressive approach to regulating the crypto industry.

With both parties now agreeing to end their appeals, the SEC vs. Ripple case is set to be concluded, closing another chapter in the ongoing debate over how cryptocurrencies should be regulated in the United States. The settlement significantly reduces Ripple’s financial penalty and marks a major step toward closing the case. However, the agreement still requires a final vote from the SEC and the completion of standard court procedures. Once finalized, the case will officially conclude, ending one of the most closely watched legal disputes in the crypto industry.

With regulatory uncertainty now behind it, Ripple is turning its focus to growth. The company has invested over $2 billion in crypto-related acquisitions, reinforcing its belief that a thriving crypto market benefits Ripple’s long-term success. The case’s resolution follows a shift in U.S. regulatory leadership, whose administration has taken a more supportive stance on crypto.

The settlement with the SEC marks a turning point in crypto regulation, reducing legal uncertainties for XRP and setting a precedent for the broader digital asset market. The case’s resolution could reshape how cryptocurrencies are classified and regulated, adding legal nuance to ongoing regulatory discussions in the U.S. The agreement provides clarity on the regulatory status of digital assets, which could influence future legal and regulatory frameworks for the crypto industry.