- The US Securities and Exchange Commission (SEC) has reached a settlement with Ripple, reducing its earlier penalty from $125 million to $50 million.
- A SEC Commissioner has expressed her dissatisfaction with the development, claiming that this undermines the court’s position in interpreting securities laws.
The long-standing legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs is concluding as both parties reach a settlement of $50 million. According to the report published by the Commission and shared by Fox Business journalist Eleanor Terrett, the agreement has already been filed as part of the layout to resolve this litigation.
The Details
In December 2020, the SEC filed a lawsuit against the blockchain company and its executives for selling XRP without registering it as a security, as indicated in our recent blog post.
In June 2023, US District Court Judge Analisa Torres granted a partial win to Ripple, ruling that while its retail sales did not violate federal securities laws, its institutional sales did. As earlier featured in our news coverage, a penalty of $125 million was imposed on Ripple on August 7, 2024. Also, the court permanently restrained them from future violations.
Fascinatingly, these are coming to an end as the Commission and Ripple are jointly requesting the court to issue an indicative order on whether the injunction should be dissolved while ordering the release of the escrow account for the $50 million penalty to be fully paid to the SEC, with the remaining returned to Ripple.
Once this provision is met, Ripple and the SEC would seek a limited remand to the court for that relief, and subsequently dismiss their respective appeals from the final judgment, according to the regulator’s statement.
Commenting on this, the SEC highlighted that this decision underscores its effort to reconsider its earlier approach to the ecosystem.
The Commission’s decision to exercise its discretion and seek a resolution of this pending enforcement action rests on its judgment that such resolution will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits of the claims alleged in the action.
Commissioner Caroline A. Crenshaw Not Happy About the SEC and Ripple Settlement
Meanwhile, not all SEC officials are happy. According to a statement by SEC Commissioner Caroline A. Crenshaw, this settlement, alongside the “programmatic disassembly” of its crypto enforcement program, would grossly affect investors and undermine the role of the court in interpreting securities laws.
In an official statement, Crenshaw outlined that the agreement specifically states that none of the parties involved would seek to vacate or amend any part of the summary judgment ruling. This implies that any future action of Ripple to sell XRP to institutional investors would be in defiance of a court order. However, the SEC can do nothing about it. According to her, this would render the several hours spent at the court meaningless.
At bottom, I have full confidence in the arguments our agency made to the Second Circuit on appeal, and equal confidence in the talent of SEC attorneys who advanced those arguments. That motivates my dissent today.
Following this development, the price of XRP recorded a 6.7% surge on its 24-hour price chart and 6.4% gains on its weekly chart, trading at $2.34. According to our recent analysis, the asset could continue to reach a new all-time-high price of $27.
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