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Ripple and SEC Propose Settlement to End Longstanding Legal Dispute
Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have submitted a joint proposal to resolve their legal battle by splitting a $125 million civil penalty. This proposed settlement could bring closure to one of the most prominent legal disputes in the cryptocurrency space.
Details of the Proposed Settlement
According to a court filing dated June 12, Ripple and the SEC have requested a Manhattan federal court to dissolve a previous injunction and release the $125 million currently held in escrow. If approved, the agreement would allocate $50 million to the SEC, while Ripple would recoup the remaining $75 million.
This proposed resolution follows a legal battle that began in December 2020. The SEC initially sued Ripple Labs, alleging that the company conducted unregistered securities offerings through institutional sales of XRP. The outcome of this case has had significant implications for the broader cryptocurrency industry and its regulatory framework.
Key Developments Leading to the Settlement
In July 2023, a federal judge ruled that Ripple’s programmatic sales of XRP did not violate securities laws. However, the court found Ripple liable for its institutional XRP sales, resulting in a $125 million penalty imposed in August 2024. The funds were held in escrow while Ripple pursued an appeal.
In April 2025, both parties agreed to pause their appeals to explore settlement options. Although an initial settlement attempt was rejected in May 2025 due to insufficient evidence of “exceptional circumstances,” the June 12 filing is a renewed effort to meet the court’s conditions for modification of the original judgment.
Shifts in SEC’s Regulatory Approach
The proposed settlement aligns with a broader shift in the SEC’s enforcement strategy under Chair Paul Atkins, who assumed the role in early 2025. The agency has been scaling back its aggressive enforcement actions in the cryptocurrency sector, prioritizing rulemaking over litigation. Several high-profile cases have been paused or dropped altogether, signaling a potential pivot in regulatory oversight.
What’s Next?
If the court approves the settlement, both Ripple and the SEC will withdraw their pending appeals, effectively closing the case. However, the judge must first determine whether the circumstances warrant modifying the original judgment and dissolving the injunction. Should the proposal be denied, the case could return to the appellate court and extend beyond Q2.
This legal resolution, if finalized, would mark a significant milestone in how U.S. law treats digital assets. The outcome could influence future regulatory approaches and provide clarity for crypto investors and companies navigating the evolving legal landscape.
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