- With a $50 million settlement, the legal tangle between the SEC and Ripple is coming to an end.
- The lawsuit was based on the sale of XRP to investors as unregistered securities.
- The standard injunction is yet to be lifted which was imposed earlier at the SEC’s request.
Ripple Labs is finally stepping out of the daunting five-year-long legal battle as the dispute with the U.S. SEC is coming to an end. As a major turning point in the case, both parties have reportedly agreed to drop their cross-appeals. SEC would keep the $50M of the $125M fine. Ripple’s Chief Legal Officer Stuart Alderoty shared his final update on X.
This conclusion comes after the SEC agreed to drop its appeal on March 19, 2025. Additionally, the agency will request Judge Analisa Torres to lift the standard jurisdiction that was imposed earlier, which required the company to register future securities sales.
SEC vs Ripple Lawsuit
The dispute began in December 2020 when the SEC filed a complaint against Ripple Labs, its CEO Brad Garlinghouse, and the co-founder Christian Larsen, alleging they raised over $1.3 billion through unregistered securities by selling XRP. The SEC’s claim centered on whether these sales constituted securities transactions.
In a key ruling in July 2023, Judge Analisa Torres determined that Ripple’s sales of XRP to institutional investors constituted unregistered securities, while sales to the general public through exchanges did not. This partial win for Ripple set a precedent regarding how cryptocurrencies are categorized based on their sales method.
Following this ruling, the SEC imposed a $2 billion penalty against Ripple, while the company argued for a significantly lower fine. In August 2024, Ripple was ordered to pay a $125 million penalty, but the SEC filed an appeal in October 2024, seeking a higher fine, while Ripple also lodged a cross-appeal challenging aspects of the judgment.
Related: SEC Proposes XRP As A Strategic Financial Asset For The U.S.
SEC’s Shift in Enforcement Strategy
The SEC’s shift in stance was expected after Trump’s reelection into the White House. Ever since Acting SEC Chair Mark Uyeda took over the agency’s reins, it has retreated from several enforcement cases, including those against Coinbase, Kraken, Gemini, etc. Uyeda’s leadership marks a shift in regulatory priorities, with the agency seemingly adopting a less aggressive stance, contrasting with Former SEC Chair Gary Gensler.
With the final steps underway, this resolution could redefine how the SEC may handle crypto regulations. However, it is certain that the Ripple case is expected to leave lasting impacts on the evolving regulatory landscape of the crypto industry.
