Ripple Labs has finally reached a settlement with the U.S. Securities and Exchange Commission (SEC) in the long-running legal dispute that began in December 2020. On March 25, Stuart Alderoty, Ripple’s chief legal officer, announced that the company has agreed to drop its cross-appeal against the SEC, following the regulator’s own decision to abandon its appeal on March 19. Under the terms, the SEC will retain $50 million of the original $125 million fine, and Ripple will recover the remaining $75 million plus accrued interest from an interest-bearing escrow account.
Timeline of the Lawsuit
The SEC originally sued Ripple in December 2020, alleging that the company raised $1.3 billion by selling XRP tokens to retail investors in violation of securities laws. In July 2023, U.S. District Judge Analisa Torres delivered a landmark partial verdict: XRP sales to retail investors on secondary markets did not constitute securities transactions, but Ripple’s $728 million in direct sales to institutional investors did violate securities regulations. The judge imposed a $125 million fine on Ripple. Both parties appealed the decision as neither won outright.
Shift Under the Trump Administration
The settlement comes amid a broader policy shift under President Donald Trump’s pro-crypto administration. Acting SEC Chairman Mark T. Uyeda has signaled a move away from the “regulation by enforcement” approach championed by former chairman Gary Gensler. At the inaugural SEC Crypto Roundtable last week, Uyeda stated that the Commission should prioritize providing regulatory clarity through rule releases rather than enforcement actions. “Explaining the Commission’s thought process through releases rather than enforcement actions should have been considered for classifying crypto assets under the federal securities laws,” he said.
This new stance prompted the SEC to drop its appeal without any conditions, according to Alderoty. Ripple’s cross-appeal drop now closes the chapter entirely. “The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” Alderoty elaborated.
Industry Implications
The settlement is widely seen as a major victory for Ripple and a turning point for U.S. crypto regulation. Ripple CEO Brad Garlinghouse commented, “Securities laws are meant to protect investors, not punish innovation. Today’s settlement shows that America needs clear crypto rules, not court rulings.” The resolution may encourage the SEC to reassess its other enforcement actions against crypto firms like Coinbase and Kraken. Market reaction was positive, with XRP price rising about 6% on the day.
Legal experts believe the case could accelerate U.S. congressional efforts to create a comprehensive regulatory framework for digital assets. With the litigation behind it, Ripple can now focus on expanding its cross-border payment business without legal overhang.