The lawsuit against Ripple, filed by the United States Securities and Exchange Commission in December 2020, is finally wrapping up.
Ripple and the United States Securities and Exchange Commission (SEC) filed a joint motion on Thursday to release the $125 million in funds held in an escrow account to pay for settlement costs ordered by the court.
According to the letter submitted by both parties, $50 million will be transferred to the SEC for the civil penalty against Ripple, with the remaining $75 million transferred back to Ripple, pending court approval. The filing attorneys wrote:
“The parties’ proposed resolution will preserve the resources of the Second Circuit by avoiding the need to decide appeals, obviate any remand for further proceedings in this Court, and bring 4.5 years of hard-fought litigation to an end.”
The SEC lawsuit against Ripple is a landmark case for crypto regulations in the United States, and formally ending the litigation will be a symbolic victory for an industry that has already largely won its battle for legal legitimacy in the US.
Related: Fungible cryptos in secondary sales are not securities, Ripple tells SEC
SEC and Ripple wind down case following 2024 ruling
In July 2023, Judge Analisa Torres ruled that secondary sales of the XRP (XRP) token are not securities, granting Ripple and the crypto industry a partial yet major victory.
However, the Judge also ruled that selling XRP to investors during funding rounds did constitute securities sales due to how the tokens were offered as compensation for investment in a business enterprise.
Ripple was ordered to pay a $125 million penalty to the SEC as per a subsequent ruling from Judge Torres in August 2024.
Unsatisfied with the outcome of the case, the SEC filed an appeal in October 2024 — roughly one month ahead of the 2024 US presidential election.
Brad Garlinghouse, the CEO of Ripple, announced that the SEC was dropping the appeal, in a March 19 X post, accompanied by a video statement from the CEO celebrating the outcome as the de facto “ending” of the case.
Shortly after the announcement, Ripple agreed to drop its cross-appeal with the SEC. The crypto firm also secured a refund from a lower court, allowing it to retain $75 million of the $125 million penalty stipulated in the August 2024 ruling.
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
