TLDR
- SEC and Ripple have officially settled their long-running lawsuit with Ripple paying $50 million
- The settlement is down from an initial $2 billion SEC request and less than the $125 million court-ordered fine
- Under the agreement, $50 million goes to the SEC while $75 million in escrow returns to Ripple
- The case began in December 2020 when the SEC alleged Ripple sold unregistered securities in the form of XRP
- XRP price rose 8% following the news to $2.30, with XRP now the fourth-largest cryptocurrency
The Securities and Exchange Commission (SEC) and Ripple Labs have officially settled their long-running legal battle over XRP token sales. According to the joint filing submitted on May 8, 2025, Ripple will pay $50 million to resolve the case that began in December 2020.
The settlement marks the end of more than four years of litigation between the regulator and the fintech company. This resolution comes after Ripple executives had indicated in March that the SEC was backing away from its aggressive stance.
Under the terms of the agreement, Ripple and two of its executives – CEO Brad Garlinghouse and Executive Chairman Chris Larsen – will pay a total of $50 million to the SEC. This amount is substantially lower than the $2 billion fine the SEC had initially requested.
The settlement also addresses the $125 million fine that District Court Judge Analisa Torres had ordered Ripple to pay last year. From this amount, $50 million will go to the regulator, while the remaining funds (approximately $75 million) will be returned to Ripple.
Legal Process and Next Steps
The resolution isn’t quite finalized yet. Several procedural steps remain before the case can be fully closed. Judge Torres must first provide an “indicative ruling” stating whether she would dissolve the injunction from her August 2024 final judgment and approve the proposed fund distribution.
If Judge Torres issues such a ruling, the SEC and Ripple will jointly request a limited remand from the US Court of Appeals for the Second Circuit. This would return the case to Judge Torres’ court.
Upon receiving the remand, both parties would file a motion in the district court formally requesting the relief outlined in the settlement. The final step would involve both sides moving to dismiss their respective appeals in the Second Circuit.
The SEC noted in its filing that the decision to settle reflects its “current enforcement priorities” and the broader context of its regulatory approach toward the crypto industry. This shift aligns with changes in the regulatory environment since President Donald Trump took office.
The original case began when the SEC hit Ripple with a $1.3 billion lawsuit in 2020. The regulator alleged that the company had conducted unregistered securities offerings through its sales of XRP tokens.
In 2023, Judge Torres ruled that programmatic sales of XRP on cryptocurrency exchanges to retail investors did not qualify as securities. However, she also ruled that $728 million worth of tokens sold to institutional investors did constitute unregistered securities sales.
Both the SEC and Ripple filed appeals following the mixed ruling. The SEC submitted its opening brief in January 2025, with deadlines set for responses from Ripple and its executives.
The appeals process was put on hold on April 10 when both sides jointly moved to pause proceedings, citing an agreement in principle to resolve the case. This motion suspended all appellate deadlines while settlement terms were finalized.
The market responded positively to news of the settlement. XRP, which is the fourth-largest cryptocurrency by market capitalization at over $132 billion, saw its price rise to $2.30 – an increase of more than 8% over a 24-hour period according to CoinGecko.
Ripple’s founders created XRP, and the company now uses the cryptocurrency for its payments services. The resolution of this case removes a major legal cloud that has hung over both Ripple and XRP for years.
The settlement comes amid what appears to be a changing regulatory approach toward the cryptocurrency industry. Since the change in administration, the SEC has withdrawn several lawsuits and investigations targeting crypto companies.
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