The money will cover the court-ordered settlement costs and could put the battle to rest
Ripple and the US Securities and Exchange Commission (SEC) have taken a step toward finalizing their lengthy legal battle. Both parties recently filed a joint request to release $125 million held in an escrow account. This money is set to cover the court-ordered settlement costs.
The plan outlined in the submitted letter details that $50 million will go to the SEC as a civil penalty against Ripple. The remaining $75 million will be returned to Ripple. This movement of funds still needs court approval.
Attorneys for both sides explained that this agreement will save the Second Circuit Court from handling further appeals. It will also prevent any additional court proceedings, effectively bringing the 4.5-year-long legal dispute to an end.
This case has been a key point of discussion for cryptocurrency regulations in the United States. A formal conclusion to this lawsuit marks an important win for the industry. Many in the crypto space believe they have largely succeeded in their fight for legal recognition in the US.
The wind-down of the case follows a significant ruling from July 2023. Judge Analisa Torres determined at that time that secondary sales of the XRP token are not securities. This was a partial but still very important victory for Ripple and the wider crypto industry.
However, the Judge also ruled that initial sales of XRP to investors during funding rounds were indeed securities sales. This was due to how the tokens were offered as payment for investments in a business venture.
Judge Torres later ordered Ripple to pay a $125 million penalty to the SEC in August 2024. The SEC, not satisfied with this outcome, filed an appeal in October 2024. This was about a month before the 2024 US presidential election. Ripple CEO Brad Garlinghouse announced on March 19 via X that the SEC was dropping its appeal.
He also shared a video celebrating this as the unofficial end of the case. Soon after Garlinghouse’s announcement, Ripple also agreed to drop its own cross-appeal with the SEC. The cryptocurrency company also received a refund from a lower court, allowing it to keep $75 million of the original $125 million penalty.
