In a significant win for Ripple Labs and XRP, the company has reached a settlement with the US Securities and Exchange Commission (SEC) that will effectively conclude their prolonged legal battle.
Ending Prolonged Legal Battle
As reported by Fox Journalist Eleanor Terret, Ripple has agreed to drop its appeal against the SEC and will pay a reduced fine of $50 million, down from the initially ordered $125 million. The SEC has also indicated its intention to ask Judge Torres to lift the ‘obey the law’ injunction that was previously imposed on the firm.
The resolution of this case marks an end to a legal saga that began in 2020 when the SEC filed a lawsuit against Ripple, alleging that the company had conducted an unregistered securities offering through the sale of XRP.
According to Terret’s insights, the SEC-Ripple settlement means that, once finalized and voted on by the Commission, the case will be resolved, allowing the blockchain payment company to move forward.
Despite the hefty legal fees, estimated to be between $150 million and $200 million, Ripple finds itself returning to a position similar to where it stood before the SEC’s lawsuit. The SEC, too, has presumably incurred significant costs in taxpayer dollars in its pursuit of the case.
Ripple’s Legal Victory: Clarity For XRP
The legal proceedings had adverse effects on XRP holders, as many exchanges such as Binance, eToro, and Coinbase opted to delist the token during the lawsuit, leading to a notable decline in its market value.
This uncertainty made other cryptocurrency projects wary of building their operations in the US, fearing potential legal repercussions from the Securities and Exchange Commission led at the time by Gary Gensler.
As highlighted by Terret, critics have pointed out that SEC Chair Gary Gensler’s focus on pursuing crypto firms for failing to register has eroded public trust.
The agency has been criticized for overlooking significant threats in the crypto space, such as the collapses of crypto exchange FTX and crypto lender Celsius, which caused substantial losses to investors.
For Ripple, there is a silver lining in this settlement, according to Terret. The company is set to pay a smaller fine than originally anticipated and may avoid the ongoing injunction that could have hampered its operations.
Additionally, Ripple can take credit for contributing to legal clarity concerning the programmatic and secondary market sales of XRP—a ruling that remains unchallenged.
Stuart Alderoty, Ripple’s Chief Legal Officer, expressed optimism in a social media post on X (formerly Twitter), indicating that this would likely be his final update on the SEC case.
Alderoty noted that the SEC has agreed to drop its appeal without conditions, and Ripple will drop its cross-appeal. The SEC will retain $50 million of the fine, which is already held in an interest-bearing escrow account, while the remaining balance will be returned to Ripple.
At the time of writing, XRP is trading at $2.45, reflecting a 9% gain over the seven-day period and inching closer to its current record high of $3.40, which was reached during the 2018 bull run.
Featured image from DALL-E, chart from TradingView.com
