Thomas Daniels
The long-running legal battle between Ripple Labs Inc. and the United States Securities and Exchange Commission (SEC), initiated in December 2020, is approaching its final chapter. On Thursday, both parties submitted a joint motion to release $125 million held in escrow, earmarked for settlement payments mandated by the court.
As detailed in the joint letter filed with the court, $50 million of the escrowed funds will be transferred to the SEC to satisfy the civil penalty imposed on Ripple, while the remaining $75 million will revert to Ripple, contingent upon judicial approval. In the filing, attorneys for both parties stated:
“The parties’ proposed resolution will preserve the resources of the Second Circuit by avoiding the need to decide appeals, obviate any remand for further proceedings in this Court, and bring 4.5 years of hard-fought litigation to an end.”
The SEC’s lawsuit against Ripple has been one of the most closely watched cases in the evolving regulatory landscape of cryptocurrency in the United States. The anticipated resolution represents not only the formal closure of a high-profile legal dispute but also a symbolic milestone for the broader digital asset sector, which has made significant strides toward regulatory recognition in recent years.
Background: SEC v. Ripple Developments Through 2024
The pivotal moment in the case occurred in July 2023, when U.S. District Judge Analisa Torres issued a landmark ruling. Judge Torres determined that secondary sales of Ripple’s XRP token did not constitute securities transactions, delivering a partial but significant victory for Ripple and the cryptocurrency industry. However, the ruling also found that Ripple’s institutional sales of XRP during fundraising rounds did qualify as unregistered securities offerings, given their nature as investment contracts.
As a consequence, Ripple was ordered in August 2024 to pay $125 million in civil penalties to the SEC. The decision triggered further legal maneuvering. In October 2024, the SEC filed an appeal to challenge elements of the ruling—an action that came mere weeks before the 2024 U.S. presidential election.
However, on March 19, 2025, Ripple CEO Brad Garlinghouse announced via X (formerly Twitter) that the SEC had withdrawn its appeal. In a video statement accompanying the announcement, Garlinghouse characterized the development as effectively concluding the protracted litigation.
Subsequently, Ripple agreed to drop its own cross-appeal and successfully petitioned a lower court for partial reimbursement. This allowed the company to reclaim $75 million of the originally imposed $125 million penalty.
The joint motion to release the escrowed funds marks the formal conclusion of nearly five years of contentious legal proceedings that have significantly shaped the legal dialogue surrounding digital assets in the United States.
