XRP News Today: Ripple SEC Settlement Proposed $125 Million Penalty

Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have taken a significant step towards resolving their protracted legal dispute over XRP. On June 12, 2025, both parties jointly filed a motion to settle the case, proposing a $125 million civil penalty to be split between the SEC and Ripple. The SEC would receive $50 million, while the remaining $75 million would be returned to Ripple. This development follows a request to Judge Analisa Torres of the Manhattan District Court to dissolve the injunction imposed on Ripple and approve modifications to the Final Judgment entered in August 2024. The motion also seeks the release of $125 million currently held in escrow, which Ripple had deposited under a previous order requiring 111% of the civil penalty to be held in an interest-bearing account.

The XRP lawsuit, initiated in December 2020, has undergone numerous developments. In July 2023, Judge Torres issued a partial summary judgment ruling that Ripple’s programmatic XRP sales to retail buyers did not violate securities laws, but institutional sales did. This ruling was pivotal in shaping how U.S. courts view digital asset classifications. Subsequently, the court imposed a $125 million civil penalty on Ripple in August 2024. Ripple contested this ruling and filed for an appeal. In April 2025, both Ripple and the SEC agreed to pause their respective appeals to explore a settlement. However, their initial attempt to modify the judgment was denied in May 2025 due to procedural shortcomings, specifically the failure to demonstrate the “exceptional circumstances” required for such a modification.

The new motion aims to address these shortcomings by citing Second Circuit precedents, such as Microsoft v. Baker and Major League Baseball, which allow judgment changes under exceptional conditions to facilitate settlements and avoid prolonged appeals. Legal expert and pro-XRP attorney Bill Morgan highlighted the importance of the court’s acceptance of the “exceptional circumstances” argument. “If Judge Torres does not accept the justification, the entire settlement falls apart,” Morgan said. “Without judgment modification, the parties would be forced to resume appeals.”

For the SEC, accepting a reduced penalty allows for quicker fund recovery while preserving the substance of earlier rulings. For Ripple, the lifting of the injunction could remove barriers to its operations, including future partnerships with financial institutions and the expansion of the Ripple ledger ecosystem. The proposed settlement would effectively conclude the SEC v. Ripple Labs Inc. case, which has been a defining moment in the regulatory debate around digital currencies in the U.S. The dissolution of the injunction would also allow Ripple to fully re-engage with business activities that had been stalled under the legal cloud.

However, if the motion is denied again, the XRP SEC lawsuit could extend into late 2025, with continued uncertainty for investors and Ripple’s global ambitions. As the crypto community awaits Judge Torres’ ruling, the proposed settlement is seen as a potentially precedent-setting moment for digital asset regulation in the United States. The evolving stance of the SEC toward digital assets, under its new chair, has taken a softer regulatory approach, shifting from aggressive enforcement to more rule-based policymaking, affecting not just Ripple, but the entire crypto industry.