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XRP News Today: Ripple Settles With SEC For $50 Million, Ends XRP Legal Battle

Coin WorldThursday, May 8, 2025 5:16 pm ET

1min read

The Securities and Exchange Commission (SEC) and Ripple Labs have reached a settlement in their protracted legal dispute over the classification of XRP, Ripple's native cryptocurrency. The settlement involves a $50 million payment from Ripple to the SEC, marking a pivotal moment in the ongoing debate over the regulatory status of digital assets.

The lawsuit, initiated in December 2020, revolved around whether XRP should be classified as a security, subject to SEC regulations, or as a commodity, which would fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). The SEC contended that XRP was an unregistered security, while Ripple asserted that it was a currency. The settlement does not explicitly classify XRP but represents a significant concession by Ripple, which has consistently denied that XRP is a security.

As part of the settlement, Ripple has agreed to drop its appeals in the case, pending the court lifting the injunction that has been in place since the lawsuit was filed. This injunction has restricted Ripple from engaging in certain activities related to XRP, including selling the cryptocurrency to U.S. investors. The lifting of the injunction would allow Ripple to resume these activities, potentially enhancing the liquidity and adoption of XRP.

The settlement also includes a $50 million payment from Ripple to the SEC, which will be used to compensate investors who were allegedly harmed by the sale of unregistered securities. This payment is substantial but relatively small compared to the potential fines that Ripple could have faced if it had lost the case. The settlement represents a compromise between the two parties, allowing them to avoid the uncertainty and expense of a protracted legal battle.

The settlement has significant implications for the broader cryptocurrency industry. It represents a victory for the SEC, which has been seeking to assert its authority over digital assets. However, it also represents a concession by Ripple, which has been a vocal advocate for the decentralized nature of cryptocurrencies. The settlement may encourage other companies to engage in similar negotiations with the SEC, rather than risking a lengthy and costly legal battle.

The settlement also underscores the ongoing debate over the regulatory status of digital assets. While the SEC has been seeking to classify cryptocurrencies as securities, the CFTC has been advocating for a more nuanced approach, recognizing that some digital assets may be commodities. The settlement does not resolve this debate but represents a step towards greater regulatory clarity in the cryptocurrency industry.

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