Ripple agrees on a $50 million settlement with the Securities and Exchange Commission, concluding their prolonged legal dispute.
Scoop: Ripple and SEC Agree to $50 Million Settlement, Marking a Major Shift for Crypto
ead the headlines last month! After a long, drawn-out legal battle, Ripple and the U.S. Securities and Exchange Commission (SEC) have finally agreed to a $50 million settlement, putting an end to their contentious multi-year tussle.
The 50-50 deal, submitted to the court on May 8, brings a definitive resolution to a case that's been a thorn in the side of Ripple (and the crypto sector at large) for years.
The Nitty-Gritty Details
The settlement, as detailed in a joint court filing, proposes that New York Judge Analisa Torres lifts an existing injunction against Ripple and releases the $125 million stuck in escrow. Here's the breakdown: Ripple will fork over $50 million—a fraction of the original fine handed down by Judge Torres—with the rest, $75 million, heading back to the crypto firm.
Moreover, the accord requires both parties to drop their respective appeals. The SEC will abandon its challenge, and Ripple will withdraw its cross-appeal. It all began in December 2020 when the SEC sued Ripple and top executives Chris Larsen and Brad Garlinghouse over allegations of unlawfully raising over $1.3 billion through the sale of Ripple's XRP token in an unregistered securities offering.
Ripple contested the claims, sparking a years-long legal battle which peaked in July 2023 when Judge Torres ruled that XRP was deemed not a security when sold to retail investors but qualified as one when sold to institutional clients. Consequently, the company was hit with a hefty $125 million fine in August 2024 for selling unregistered securities to institutional investors. However, the SEC tossed a wrench into the works by appealing the decision the following January. The regulatory agency argued that XRP transactions should be treated similarly between institutional and retail sales, causing Ripple to respond with a counter-appeal.
Reports emerged in the following months that the SEC would drop its appeal due to changes at the top, including the departure of chair Gary Gensler. Still, there was no official word on the matter from the SEC.
So, What's Next?
According to lawyer James K. Filan, Judge Torres must sign off on the proposed terms before the settlement is set in stone. Once she does, Ripple and the SEC will ask for a limited remand from the Second Circuit Court of Appeals to officially execute the agreement.
Upon approval, the injunction against the crypto firm will be lifted, the escrowed funds will be distributed, and both sides will dismiss their appeals, effectively bringing the drama to a close.
The settlement announcement sent waves through the crypto community, with XRP's price climbing 5.2% over the past 24 hours, hitting $2.29. Although it hasn't quite caught up to the broader crypto market's 7% weekly surge, the asset remains one of the strongest performers of the past year, boasting a 340% uptick.
The XRP community eagerly awaited the news, as prominent pro-Ripple attorney John E. Deaton succinctly put it: "It's over."
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A Fresh Chapter Awaits
With the Ripple-SEC legal standoff coming to a close, the future of the crypto sector seems brighter than ever. Stay tuned for more updates as this story unfolds!
References:1. Coindesk2. The Block3. Cointelegraph4. Bloomberg5. Washington Post
- The Ripple-SEC settlement, worth $50 million, appeals to many in the finance world as it marks a significant shift in the legal landscape of cryptocurrencies, particularly for the blockchain-based digital asset, Ripple.
- The agreement requires both parties, Ripple and the SEC, to succinctly drop their respective appeals, with Ripple withdrawing its cross-appeal and the SEC abandoning its challenge.
- The settlement, once approved by Judge Torres, will lead to numerous consequences, such as the lifting of the injunction against Ripple, the release of the $125 million stuck in escrow, and the dismissal of appeals, which brought years of legal tussle to an end.
- With the resolution of the Ripple-SEC legal battle, the business landscape in the crypto sector appears brighter, and XRP, one of the strongest performers of the past year, may continue to attract the attention of performers in the finance industry.
