Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have jointly requested a federal court to dissolve the longstanding injunction on certain XRP sales and release over $125 million currently held in escrow.
Court Request from Ripple and SEC
Ripple and SEC have submitted a joint request to the Manhattan District court to dissolve the current injunction in their ongoing case. They propose that $50 million be paid to the SEC, with the remaining funds returned.
Background of Ripple Case
The SEC first sued Ripple Labs in December 2020, alleging that the company and its executives conducted unregistered securities offerings through institutional sales of XRP. The court later ruled that while Ripple’s institutional sales of XRP violated securities laws, the programmatic sales to retail investors via exchanges did not. As a result, Ripple was ordered to pay a civil penalty exceeding $125 million and was permanently enjoined from future violations.
Reactions and Expected Consequences
The proposed settlement has sparked debate within the regulatory community. SEC Commissioner Caroline Crenshaw criticized the agreement, arguing that it undermines both the court’s authority and the SEC’s enforcement program. Legal analysts note that this outcome is viewed as a partial victory for Ripple, particularly in comparison to the SEC’s initial demand for a $2 billion penalty. The court is expected to review the joint request in the coming weeks, and if approved, Ripple will regain access to the escrowed funds, potentially impacting regulatory approaches to cryptocurrencies.
The joint request from Ripple and SEC highlights the complex and evolving nature of cryptocurrency regulation in the U.S. The outcome of this case may set a new precedent for understanding the legal status of digital assets.
