Ripple and the U.S. Securities and Exchange Commission (SEC) have reached a settlement, concluding a long-standing legal battle that began in December 2020.
Conclusion of the Legal Case
Ripple has agreed to drop its cross-appeal against the SEC, consenting to pay $50 million out of the originally imposed $125 million fine. The remaining $75 million will be refunded to the company. The SEC will also request the court to lift an injunction previously imposed on Ripple.
History of the Legal Battle
In December 2020, the SEC sued Ripple, accusing the company of conducting an unregistered securities offering through the sale of XRP. The case revolved around whether XRP should be classified as a security. In July 2023, Judge Analisa Torres ruled that sales of XRP to retail investors did not constitute securities transactions, but that $728 million in XRP sales to institutional investors did violate securities laws.
Reasons for SEC's Withdrawal
The SEC's decision to drop its appeal may indicate a shift in enforcement strategy since Gary Gensler resigned as SEC Chair. Despite the positive news, XRP’s price remained unchanged.
The resolution of the Ripple vs. SEC case could influence future cryptocurrency regulations in the U.S., highlighting the need for clear rules in the sector.
