- Ripple and the SEC agreed to settle their XRP lawsuit with $50 million payment to the regulator.
- Originally, the SEC sought $2 billion, but a court restricted penalties to $125 million in 2024.
- This ends a four-year legal battle and settles all pending appeals between Ripple and the SEC.
The U.S. Securities and Exchange Commission (SEC) has agreed to settle its lawsuit against Ripple Labs for $50 million. The settlement brings an end to a legal dispute that began in 2020 over the sale of XRP, Ripple’s digital token.
The two sides jointly filed a petition in a Manhattan court on May 8th for the purpose of having an existing injunction dissolved. The court had earlier required Ripple to pay $125 million in civil fines that were locked up by an escrow account. $50 million would be given to the SEC and $75 million would be returned to Ripple under the proposed agreement.
Settlement Follows Years of Legal Dispute
The SEC first filed suit in December 2020, claiming Ripple sold XRP without registering it as a security. The agency had originally sought a $2 billion fine, targeting Ripple and its executives for unregistered securities sales. Judge Analisa Torres in 2023 ruled that XRP was not security when they were sold to retail investors on exchanges. However, the court held that $728 million of XRP sold to institutional buyers had breached securities laws. According to the ruling, Ripple was required to pay $125M in penalties in 2024.
Both the SEC and Ripple filed their appeals against some parts of the judgment. In a separate court filing in October 2023, Ripple’s executives, CEO Brad Garlinghouse and Chairman Chris Larsen, were exonerated of liability. The settlement agreement contains all remaining disputes between the parties.
Under the deal, both parties agreed not to seek changes to the court’s original ruling. The appeals process will be paused and if the judge grants the requested order, the SEC and Ripple will formally end their respective appeals. SEC Commissioner Caroline Crenshaw dissented from the decision to settle. She argued that the agreement undermines the court’s ruling and sends a weak message about compliance.
Ripple Case Reflects Changing Crypto Policy
The settlement is part of a wider change in the SEC’s crypto enforcement during the Trump administration. The agency has streamlined or put some of the high-profile cases on hold since President Trump came to power. Trump promised in the campaign to end “regulation by enforcement” and the SEC’s activity has started to reflect this.
The Ripple agreement is among the first significant settlements under this new approach. It will lower the fine beyond half and settle all outstanding litigation, including appeals. The SEC said it would reform its crypto enforcement policies when the case is settled. The regulator said the resolution was not merit-based for the original claims. Instead, it argued for the modernization of oversight of digital assets.
Ripple had announced the figure of $50 million settlement earlier this year. The payment will be from existing escrow account, subject to approval by Judge Torres. After approval the SEC and Ripple will withdraw their appeals in the Second Circuit.
The lawsuit was closely watched by the crypto industry. Many viewed the outcome as a potential benchmark for future enforcement actions involving digital tokens and blockchain companies.
