A federal appellate court has temporarily halted the long-running legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs Inc., marking the most significant step toward a settlement since the lawsuit began in 2020. The order, formally issued on Tuesday in New York, approves a joint motion by both parties to hold the appeal in abeyance. The court directed the SEC to file a status report within 60 days.
The case, docketed under numbers 24-2648(L) and 24-2705(XAP), involves complex disputes over the classification of digital assets. Ripple and its executives—Brad Garlinghouse and Chris Larsen—have been fighting SEC allegations that XRP constitutes an unregistered security. The pause signals that a $50 million settlement is nearing completion, a dramatic reduction from earlier demands.
Key Settlement Details Emerge
According to court filings and public statements, Ripple has agreed to pay a penalty of approximately $50 million to resolve all pending appeals and claims. In a notable departure from typical SEC settlements, Ripple CEO Brad Garlinghouse disclosed that the company is exploring the option of paying the fine in XRP tokens rather than fiat currency. If accepted, this would mark a precedent-setting approach to regulatory penalties in the crypto space.
Garlinghouse also expressed strong confidence that the SEC will approve spot XRP exchange-traded funds (ETFs) once the legal cloud is lifted. The prospect of a regulatory-compliant XRP ETF has galvanized market participants, as it would open the door for institutional investment through traditional financial channels.
Market Impact and Broader Regulatory Shift
The pause in litigation is widely viewed as a watershed moment for U.S. crypto regulation. For years, the SEC’s enforcement-heavy stance has been criticized for stifling innovation, and the Ripple case became a symbol of the industry’s pushback. The willingness to settle for a fraction of the original penalty suggests a more pragmatic approach under the current SEC leadership.
However, the settlement does not resolve the fundamental question of whether all XRP sales are securities transactions. The SEC continues to insist that investor protection remains paramount, while Ripple maintains that most of its sales were not investment contracts. The 60-day status report will likely provide further clarity on whether the settlement is finalized and whether any additional conditions are imposed.
Following the news, XRP’s price rose approximately 8% in intraday trading, reflecting renewed optimism. Analysts caution that the deal still requires approval from the SEC commissioners and the district court. If successful, the final resolution could come within two months, setting the stage for a new era in U.S. digital asset regulation.