XRP News Today: Ripple SEC Dispute Nears End With $125 Million Settlement

Ripple and the U.S. Securities and Exchange Commission (SEC) have taken a significant step towards resolving their long-standing legal dispute. The two parties have jointly requested the Manhattan District Court to dissolve a prior injunction and release $125 million currently held in escrow. This move indicates a potential end to the nearly five-year legal battle between the blockchain payments firm and the regulatory body.

The proposed settlement, detailed in a court document filed on Thursday, outlines that $50 million of the escrowed funds would be paid to the SEC as a civil penalty, with the remaining $75 million returned to Ripple. The joint motion emphasizes that this settlement would promote efficiency, avoid additional litigation, and align with the SEC’s recent actions in other crypto registration cases. The legal saga began in late 2020 when the SEC accused Ripple of raising $1.3 billion by selling XRP as unregistered securities.

In 2023, Ripple achieved a partial legal victory when Judge Torres ruled that programmatic sales of XRP to retail buyers via exchanges did not constitute securities offerings. However, she determined that Ripple’s institutional sales violated securities laws. Following this ruling, the SEC initially demanded a $2 billion fine, which was later reduced to $125 million. Both parties are now seeking to finalize the settlement with $50 million going to the SEC and $75 million returned to Ripple.

Prominent attorney and crypto personality Bill Morgan has highlighted the importance of the latest motion, stating that if the motion is not allowed, the settlement agreement would not be varied, and the appeal and cross-appeal would continue. Judge Torres previously rejected an earlier joint motion for an indicative ruling on the settlement due to procedural flaws and the pending appeals before the Second Circuit. The recent joint motion cites “exceptional circumstances,” including the SEC’s shift in its crypto enforcement approach under the new chairman appointed by U.S. President Donald Trump.

The current motion reflects a broader effort to end all pending appeals and avoid further litigation. Both parties emphasize that “exceptional circumstances” now exist, warranting the court’s reconsideration of the penalty structure and the injunction’s continued validity. Ripple’s move to reduce its financial liability while closing the legal chapter aligns with industry efforts to resolve regulatory uncertainty. The SEC’s willingness to accept a reduced fine, if approved, would signal a shift in its litigation strategy amid ongoing scrutiny of its enforcement-centric approach to crypto regulation.

The court has not yet ruled on the renewed joint request. If the court grants the indicative ruling, the SEC and Ripple intend to petition the U.S. Court of Appeals for the Second Circuit to remand the case for formal resolution in the district court. This effort follows the court’s May 8 decision denying a similar request for failing to demonstrate “exceptional circumstances” under Rule 60(b) of the Federal Rules of Civil Procedure. The case stems from a December 2020 lawsuit alleging Ripple violated federal securities laws by selling XRP as an unregistered security.