A federal appellate court has granted a temporary pause in the long-running legal battle between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC), as both parties move closer to a $50 million settlement that could reshape the regulatory landscape for XRP.
Court Halts Proceedings, Orders Status Report
On Tuesday, the U.S. Court of Appeals for the Second Circuit issued an order approving the joint motion to hold the appeal in abeyance. The directive states: “The parties jointly move to hold this appeal in abeyance, with the United States Securities & Exchange Commission directed to file a status report within 60 days of this order.” The case, filed under docket numbers 24-2648(L) and 24-2705(XAP), involves complex litigation over the classification of digital assets as securities.
The pause comes after Ripple and the SEC jointly requested a halt last week, citing a tentative settlement nearing completion that would resolve all pending appeals. Under the proposed agreement, Ripple’s penalty would be reduced from the initial $125 million judgment to $50 million. Both sides aim to conserve litigation resources while awaiting SEC approval and a district court decision.
Ripple CEO: $50 Million Could Be Paid in XRP, ETF Optimism
Ripple CEO Brad Garlinghouse confirmed that the company has discussed the possibility of paying the $50 million penalty in XRP tokens, a move that would further legitimize the digital asset. He also expressed confidence that the SEC will approve spot XRP exchange-traded funds (ETFs), noting that the agency’s recent shift toward pragmatic regulation favors such products. The SEC, as Plaintiff-Appellant-Cross-Appellee, is engaged in a high-profile dispute with Ripple Labs, as well as executives Brad Garlinghouse and Chris Larsen.
Unresolved Regulatory Questions Loom
While the court’s pause provides temporary relief, it leaves unanswered questions about the SEC’s authority over digital tokens. Pro-crypto advocates continue to argue that the SEC’s enforcement-heavy approach stifles innovation, particularly in emerging blockchain technologies. In contrast, the agency insists that regulatory oversight is essential for protecting investors and maintaining market integrity as crypto assets become more integrated into the financial system.
XRP supporters view the settlement as a potential landmark victory that could establish clearer rules for digital asset classification in the U.S. If finalized, the deal would mark the first major resolution of a crypto securities case under the current administration, potentially setting a precedent for other tokens like Solana, Cardano, and Polygon. The market has responded positively, with XRP prices stabilizing above $0.60 amid renewed optimism for regulatory clarity and ETF approval. Ripple’s case has been closely watched as a bellwether for the crypto industry’s fight against perceived overreach by U.S. regulators.
Ripple’s legal team is expected to file a formal settlement motion in the coming weeks, contingent on SEC internal approvals. Meanwhile, the court has ordered the SEC to provide a status update within 60 days, keeping the case on a short leash as both sides work toward a final resolution.