Ripple vs. SEC Finally Over After $50M Fine?

Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC) is finally coming to a close. The company has agreed to drop its cross-appeal against the SEC, bringing an end to a lawsuit that has dragged on since December 2020.

As part of the settlement, Ripple will pay $50 million out of the original $125 million fine imposed by the SEC. The remaining $75 million will be refunded to the company. The SEC will also request the court to lift an injunction previously imposed on Ripple, though the final legal formalities are still pending.

This settlement marks the final chapter in one of the most significant regulatory battles in crypto history. The case was seen as a test of whether digital assets like XRP should be classified as securities under U.S. law.

Ripple’s Chief Legal Officer, Stuart Alderoty, announced the decision in a post on X (formerly Twitter), stating that the company had finalized the “last crossing of t’s and dotting of i’s” in the case.

“Last week, the SEC agreed to drop its appeal without conditions. Ripple has now agreed to drop its cross-appeal,” Alderoty wrote.

Alderoty emphasized that the settlement does not imply any admission of wrongdoing by Ripple. However, the agreement is still subject to a formal SEC vote and final approval from the court.

A Long and Fierce Battle Ends

The SEC originally sued Ripple in December 2020, accusing the company of conducting an unregistered securities offering through the sale of XRP. The case revolved around whether XRP should be classified as a security, a legal battle that had major implications for the broader crypto industry.

In July 2023, Judge Analisa Torres ruled that Ripple’s sales of XRP to retail investors on exchanges did not constitute securities transactions. However, she also ruled that $728 million in XRP sales to institutional investors did violate securities laws.

The SEC initially sought $1.9 billion in penalties, but in August 2024, Judge Torres imposed a significantly lower fine of $125 million and placed an injunction on Ripple’s institutional sales.

Ripple had appealed the ruling on institutional sales, arguing that the decision lacked clarity. However, with the SEC withdrawing its own appeal last week, Ripple has now decided to drop its counter-appeal, effectively ending the case.

Why Did the SEC Back Down?

The SEC’s decision to drop its appeal signals a shift in its enforcement strategy. Since Gary Gensler resigned as SEC Chair in January, the agency has reversed several of its enforcement actions against crypto firms.

Ripple CEO Brad Garlinghouse had hinted last week that the SEC was likely to end its appeal, and now that prediction has come true. Some industry insiders believe the regulator is now realizing that lawsuits alone will not provide regulatory clarity for crypto assets.

Despite the positive news, XRP’s price remained largely unchanged. Many analysts believe the market had already priced in a favorable outcome for Ripple, given how long the case had been dragging on.

The Ripple vs. SEC lawsuit has been one of the most important legal battles in the crypto space. Its resolution could influence how regulators approach other cryptocurrencies in the future.

The case has also highlighted the need for clear crypto regulations in the U.S. Lawmakers are still debating how to classify digital assets, and this settlement might push Congress to establish more concrete guidelines.