The SEC’s years-long crusade against the crypto industry seems to be over.
The final chapter closed on Tuesday, when Ripple’s chief legal officer, Stuart Alderoty, announced that the company agreed to drop its cross-appeal with the U.S. Securities and Exchange Commission and will pay a reduced fine of $50 million — considerably lower than the original $125 million imposed penalty.
Ripple Will Get $75 Million Refund
As reported by ZyCrypto last week, Ripple CEO Brad Garlinghouse revealed that the Securities and Exchange Commission had dropped its appeal in the prolonged case regarding the XRP cryptocurrency.
Now, Ripple has also agreed to drop its cross-appeal against the SEC in the US Court of Appeals for the Second Circuit. A cross-appeal would have given Ripple an opportunity to contest its $125 million liability. However, Alderoty indicated that the SEC will keep only $50 million of the amount in escrow — the remaining $75 million will be returned to the blockchain firm.
“The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” the Ripple CLO posted on X in what could be his potential “last update” on the case. “The agency will also ask the Court to lift the standard injunction that was imposed earlier at the SEC’s request. All subject to Commission vote, drafting of final documents and usual court processes.”
The original suit centered on allegations that Ripple raised $1.3 billion through the sale of its XRP token without registering it as a security, resulting in a multi-year-long bruising legal standoff.
Ripple got a partial ruling in its favor back in 2023, but the SEC filed an appeal seeking to have that decision overturned.
District Judge Analisa Torres found that Ripple’s programmatic sales of XRP on a secondary market did not qualify as securities transactions, while those made to institutional investors did. Ripple was fined $125 million in August last year for the institutional sales.
Shifting Regulatory Landscape
The settlement marks the conclusion of one of the crypto industry’s most closely monitored cases. The end of the suit also sets the stage for potential U.S.-listed spot XRP exchange-traded funds (ETFs), with a handful of issuers having filed paperwork with the SEC in recent months.
The SEC’s decision to settle with Ripple comes as the Securities and Exchange Commission has adopted a friendlier stance since the new Trump administration rolled in following the departure of crypto foe Gary Gensler in January.
In recent weeks, the agency has revoked its highly controversial SAB 121 accounting rule in a significant policy reversal. Moreover, crypto-related companies, including Coinbase, Kraken, OpenSea, and Robinhood, all previously saw lawsuits or probes dismissed. It’s now Ripple’s turn to take a victory lap.
