XRP News Today: Ripple and SEC Agree to $125 Million Settlement Ending 4.5 Year Legal Battle

Ripple and the United States Securities and Exchange Commission (SEC) have jointly filed a motion to release $125 million in funds held in an escrow account. This move comes as the legal battle between the two entities, which began in 2020, nears its conclusion. According to the joint letter submitted to the court, $50 million will be transferred to the SEC as a civil penalty against Ripple, while the remaining $75 million will be returned to Ripple, pending court approval. The filing attorneys emphasized that this proposed resolution will conserve judicial resources by avoiding the need for further appeals and bring an end to the 4.5 years of litigation.

The SEC's lawsuit against Ripple has been a landmark case for crypto regulations in the United States. The legal battle has been closely watched by the industry, as it has significant implications for the regulatory landscape of digital assets. In July 2023, Judge Analisa Torres ruled that secondary sales of the XRP token did not constitute securities offerings, granting Ripple and the crypto industry a partial yet major victory. However, the judge also ruled that selling XRP to investors during funding rounds did constitute securities sales. Ripple was subsequently ordered to pay a $125 million penalty to the SEC in August 2024.

Unsatisfied with the outcome, the SEC filed an appeal in October 2024. However, the SEC later dropped the appeal, and Ripple agreed to drop its cross-appeal. The crypto firm also secured a refund from a lower court, allowing it to retain $75 million of the $125 million penalty. This development comes as the SEC, under new leadership, has begun to shift away from its previously aggressive crypto enforcement stance. Several high-profile lawsuits and investigations initiated by former Chair Gary Gensler have since been dropped. The joint motion to release the escrowed funds and dissolve the injunction signifies a potential end to one of the most contentious legal battles in the cryptocurrency industry. If approved, this resolution could remove a significant overhang for XRP, which has been a subject of intense scrutiny and legal debate since the SEC’s lawsuit was filed in 2020.

The outcome of this case could have far-reaching implications for the regulatory landscape of digital assets and the broader cryptocurrency market. The proposed deal would see Ripple and its top executives pay $50 million, with the remaining funds reverting to Ripple. This development comes as the SEC, under the current administration, has begun to shift away from its previously aggressive crypto enforcement stance. Several high-profile lawsuits and investigations initiated by former Chair Gary Gensler have since been dropped. In May, SEC Commissioner Caroline Crenshaw criticized this shift, warning that the agency’s retreat from crypto enforcement endangers investors. Judge Torres had previously rejected a motion for an indicative ruling on the settlement, citing procedural issues due to the pending appeals before the Second Circuit. Both sides have since filed to suspend those appeals.