After more than four years in court, Ripple and the United States Securities and Exchange Commission (SEC) are close to wrapping up their high-profile legal battle.
Legal Dispute Nears Final Stage
The ball got rolling in December 2020 when the SEC went after Ripple, alleging it stepped outside the lines of securities regulations through its XRP sales. Since then, both parties have fought through various court proceedings, leading up to the current stage where a joint motion has been filed to release funds in escrow.
This past Thursday, Ripple and the SEC came to the table together, asking the court to green-light the return of $125 million that had been sitting under lock and key in escrow. This money was initially set aside to cover financial penalties imposed on Ripple in connection with the case. The request is now before Judge Analisa Torres, who has overseen much of the proceedings.
Image 1: Ripple XRP (Source: Unsplash)
Breakdown of the Proposed Settlement
The deal includes a transfer of $50 million from Ripple’s held funds to satisfy the penalty imposed by the regulator. The remaining $75 million would return to Ripple, provided the court grants permission. This division aligns with a settlement reached earlier between the parties.
The funds are currently sitting in an interest-bearing escrow account under Ripple’s legal counsel. Both Ripple and the SEC believe releasing the funds in this way reflects the terms agreed upon and helps conclude the legal matter efficiently. The motion outlines that this arrangement is in line with rules under the U.S. Federal Rules of Civil Procedure, particularly Rule 60(b), which allows courts to modify previous rulings if exceptional circumstances exist.
The case’s complexity has required multiple filings, hearings, and legal arguments. This latest motion comes as both parties seek to avoid unnecessary delays and court resources, especially with pending appeals still unresolved.
How the Case Progressed
The turning point in the lawsuit came in July 2023 when Judge Torres ruled on how XRP tokens were sold. She decided that selling XRP on public exchanges did not amount to selling securities. This outcome was considered a major win for Ripple and had a wider impact on the crypto industry.
However, she also found that Ripple’s sales of XRP during funding rounds did fall under the definition of securities. That meant the company had breached U.S. law by selling unregistered securities. As a result, Ripple was ordered to pay a penalty of $125 million, based on the judge’s final ruling in August 2024.
Not long before Americans headed to the polls in late 2024, the regulator decided to stir the pot. Displeased with how parts of the ruling played out, it lodged an appeal in October, reigniting tensions. The timing raised eyebrows, landing right in the thick of a heated political season. Ripple, unwilling to let things slide, shot back with its own legal reply—challenging elements of the verdict it felt hadn’t gone its way either. Both sides were clearly not done trading blows.
End of Appeals and Final Agreement
By the early months of 2025, it became clear the dust was finally settling between the two sides. The drawn-out standoff, which had gripped the crypto world for years, appeared to be winding down. In March, Ripple’s boss, Brad Garlinghouse, took to social media with a message that left little doubt—things were wrapping up. He indicated that the watchdog had decided to put its legal weapons down.
Soon after, Ripple made its own move, stepping away from its legal comeback. With both parties choosing to lay down their arms, the path was cleared for the final chapter to unfold. What had once seemed like an endless courtroom drama was now heading towards the finish line.
Legal representatives for both Ripple and the SEC argue that this move is justified, especially since the two sides have already settled. They also point out that it would save the court system from further strain and bring the long-running matter to a close without dragging it through more legal procedures.
Image 2: (Source: Unsplash)
SEC’s Recent Actions on Crypto
This settlement request follows a shift in how the SEC is handling crypto-related cases more broadly. Acting SEC Chair Mark Uyeda earlier this year introduced a new crypto task force aimed at refining the agency’s regulatory approach. Since then, several high-profile crypto enforcement cases have been dropped or settled, including those involving major industry players.
The Ripple case, having been one of the most watched in the crypto space, has also influenced how regulators approach digital assets. By agreeing to this settlement, both the SEC and Ripple appear to be recognising the need to bring closure while still maintaining key parts of the original rulings.
Importantly, this motion does not seek to change the July 2023 summary judgment which stated that some XRP sales did not break securities laws. That part of the ruling remains intact and will still serve as legal precedent.
Moving Forward
With the motion now in court, all eyes are on Judge Torres’ next move. If she approves the request, Ripple will retain $75 million from the initial penalty amount, while the SEC receives the agreed $50 million. The case would then be formally concluded, ending a lengthy and closely followed chapter in crypto regulation.
Read Also: XRP in the Spotlight: Ripple’s SEC Case Nears End as June Momentum Builds
For Ripple, this would allow the company to move forward without further legal overhang. For the SEC, it closes one of the most debated crypto enforcement cases in recent years. While the broader industry continues to wait for clearer regulations, the end of this case could set the tone for how future disputes are handled.
