- Ripple agrees to pay $50M, settling its SEC case.
- The SEC will lift the injunction that restricted Ripple’s operations.
- The settlement opens the door for potential XRP ETFs.
The dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) has come to an end after a settlement was reached. The crypto firm will pay a $50 million fine instead of the initial $125 million amount. The settlement also calls for Ripple to dismiss its cross-appeal against the SEC.
Settlement Details
Ripple’s Chief Legal Officer, Stuart Alderoty, took X (formerly Twitter) to announce the development. The decision by the firm to pay $50 million aims to close a lawsuit that started in 2020. The SEC will keep $50 million from the earlier amount given to Ripple in an escrow account. The remaining $75 million will go to Ripple. Additionally, the SEC will seek to have the original injunction made by the United States District Judge Analisa Torres lifted as well. This injunction mandated Ripple to register its future securities sales.
The case started when the SEC accused Ripple of engaging in unregistered securities sales through the XRP tokens. The case drew significant attention in the crypto industry due to its implications for the regulatory framework surrounding digital currencies. The settlement has led to the end of this very high-profile lawsuit for both litigants, allowing them to move forward.
Impact on Ripple and the Crypto Industry
With the settlement of the lawsuit, Ripple is now capable of running its business without the limitations that it faced earlier. This includes the ability to perform on-demand liquidity (ODL) sales without running into legal issues. The decision of the SEC to dismiss the case and lift the injunction marks a shift in the regulatory environment. Recently, several companies, such as Robinhood, Coinbase, and Binance have seen their lawsuits dropped.
Legal experts had speculated that Ripple was holding out the settlement in an attempt to lower the fine while getting rid of the injunction. This is a major victory for Ripple since it can now operate in the market with relatively more ease. The settlement also paves the way for new investment instrument opportunities like exchange-traded funds (ETFs) on XRP, which have gained traction in the past few months.
Ripple CEO Discusses Future, US Growth, and Crypto Legislation
During a recent interview with FOX Business, Ripple CEO Brad Garlinghouse spoke about the firm’s future after the SEC decided to withdraw the lawsuit. He noted that 95% of Ripple’s customers are international, but now the company has plans to expand its operations in the United States. He also commented that domestic interest has increased since Trump took office, with Ripple securing more deals post-2016 than in the six months prior.
Garlinghouse explained how Ripple’s technology could influence the U.S. financial system over the next two decades. Payments, real estate, and securities developments are considered by him as capable of revolutionizing the sector. Additionally, he noted that Trump’s executive orders have helped make the US friendly to the crypto firms and deployed the country to recognize blockchain technology.
On the stablecoin legislation issues, Garlinghouse was optimistic about regulatory clarity. He explained that clear rules would help establish trust, encourage adoption, stimulate technological development, and create new jobs in the U.S. industry.
