- Ripple will pay $50 million to settle the SEC case over alleged unregistered XRP sales.
- The SEC will return over $75 million from escrow funds to Ripple after court approval.
- The agreement ends a multi-year legal dispute and avoids further appeals from both parties.
The U.S. Securities and Exchange Commission has moved to settle its long-running legal case against Ripple Labs. The agency filed a motion on May 8 requesting that a federal court in Manhattan approve the terms of the agreement. The deal would end the injunction against Ripple and allow the release of escrowed funds.
The proposed settlement includes a $50 million civil penalty to be paid by Ripple to the SEC. An additional $75 million from the escrowed funds would be returned to Ripple, pending court approval. The request to dissolve the final judgment was jointly filed by both parties.
The SEC said the move reflects a strategic shift in its regulatory approach toward cryptocurrency. The agency noted that the settlement does not reflect any change in the merits of the claims made against Ripple.
The lawsuit was initially filed in December 2020. The SEC accused Ripple of violating securities laws by selling XRP tokens without registering them. Initially, the SEC sought nearly $2 billion in penalties. A judge ruled in 2023 that XRP was only a security when sold to institutional investors. The decision marked a partial victory for Ripple and the broader crypto industry. In August 2024, Ripple was ordered to pay a $125 million fine.
Under the settlement, both the SEC and Ripple would drop their appeals currently pending in the U.S. Court of Appeals for the Second Circuit. Judge Analisa Torres must approve the indicative ruling before the process moves forward. Ripple’s CEO, Brad Garlinghouse, and Executive Chairman Chris Larsen were also named in the original case. The remaining claims against them were dismissed with prejudice in late 2023. They are also covered by the new agreement.
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The SEC noted that the $50 million penalty is authorized under Section 20(d) of the Securities Act of 1933. The settlement resolves all claims listed in the amended complaint filed by the agency. Commissioner Caroline Crenshaw dissented from the decision, saying it undermines the court’s previous ruling. The remaining SEC commissioners supported the agreement, which was reached through negotiations.
The court had previously ordered Ripple to place the fine in escrow. That requirement came with a stay on enforcement while the appeal process played out. The new motion requests the release of those funds. Officials say the agency is now focused on reforming its overall stance on digital assets.
