David Edwards
In a pivotal development for the digital asset industry, the U.S. Securities and Exchange Commission (SEC) and Ripple Labs have reached a $50 million settlement, formally ending a years-long legal confrontation that has shaped regulatory discourse around cryptocurrencies.
The long-running SEC vs. Ripple dispute has been resolved.
To indicate their mutual decision to end the well-known lawsuit, both parties filed a joint filing with the U.S. District Court for the Southern District of New York on May 8. Pending court approval, the proposed conditions put a definitive conclusion to one of the most significant enforcement proceedings in the crypto business.
Ripple will pay the SEC $50 million as part of the settlement, which is a substantial reduction from the $125 million penalty that was originally assessed. Judge Analisa Torres must lift the standing injunction against Ripple before the remaining $75 million in escrow can be released to the business.
Ripple and the SEC have both decided to drop their appeals; the business has withdrawn its cross-appeal, while the government has retracted its challenge.
A Court Case That Defined Regulation of Crypto
The SEC accused Ripple and its executives, Brad Garlinghouse and Chris Larsen, of undertaking a $1.3 billion unregistered securities offering through XRP transactions in December 2020, sparking the start of the court battle. The assertion that XRP is not a securities was refuted by Ripple.
Judge Torres’ decision in July 2023 that XRP does not qualify as a security in retail transactions but does in institutional sales marked a turning point in the dispute. In August 2024, Ripple was fined $125 million as a result of this split ruling.
In January 2025, the SEC filed an appeal, aiming to eliminate the differentiation between institutional and retail sales. In its own counter-appeal, Ripple retorted that the court’s reading was correct. Up until today, the appeals have caused a regulatory deadlock.
Shifting Regulatory Winds and Their Effect on Industry
Momentum swung in favor of a settlement after the SEC’s leadership changed, notably the departure of previous Chair Gary Gensler. Reports had indicated that the SEC was getting ready to withdraw its appeal, even though there had been no official notification prior to the May filing.
Judge Torres must now issue an indicative order approving the terms, according to legal expert James K. Filan. After she gives her consent, the parties will ask the Second Circuit for a remand so they may carry out the settlement and formally end the case.
