Ripple Labs and SEC Reach Settlement, Ending Five-Year Legal Dispute
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The long-standing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has finally come to a close. On August 7, a joint filing was submitted to dismiss appeals in the U.S. Court of Appeals for the Second Circuit, marking the end of the nearly five-year dispute.
Ripple Labs Can “Get Back to Business”
Ripple’s chief legal officer, Stuart Alderoty, confirmed the outcome in an August 8 post on X, stating that the case was officially over and the company could now focus on its business operations.
Terms of the Settlement
Under the terms of the dismissal, the SEC withdrew its appeal of a 2023 ruling that XRP sales on public exchanges were not securities. In return, Ripple dropped its cross-appeal over the finding that institutional XRP sales violated securities laws. Each side will bear its own legal costs.
Escrow Funds to be Disbursed
As a result of the settlement, $125 million held in escrow since June will be disbursed. $50 million will be paid to the U.S. Treasury as a penalty, while $75 million will be returned to Ripple.
Institutional XRP Sales Injunction Remains
A permanent injunction on institutional XRP sales remains in force. However, the settlement does not require Ripple to admit any wrongdoing, and XRP’s classification for retail sales has not changed.
A Regulatory Milestone
The outcome of the case is being seen as a regulatory milestone, reflecting a softer stance by the SEC under incoming chair Paul Atkins. This is not the first time the SEC has retreated from a high-profile enforcement action, with similar cases against Coinbase and Kraken also seeing settlements.
Market Reaction
Following the news, XRP rose 12%, with 24-hour trading volume reaching $9.54 billion, up nearly 140% from the previous day. This surge in trading volume reflects renewed market interest in the token.
From Courtroom Battle to Final Settlement
The SEC’s lawsuit, filed in December 2020, accused Ripple of raising $1.3 billion through unregistered securities sales of XRP. Ripple refuted the claims, arguing that XRP is not a security.
In July 2023, Judge Analisa Torres issued a split decision, holding that institutional sales satisfied the legal threshold under the Howey Test but programmatic sales to retail buyers were not securities. The decision was hailed as a partial win for Ripple and the crypto industry.
The case saw multiple appeals, settlement talks, and procedural setbacks before the joint dismissal. Despite the challenges, Ripple has emerged with its business intact and a renewed sense of optimism for the future.
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