08.08.2025 11:59
The protracted legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, spanning nearly five years, has officially concluded. A joint decision to drop all appeals brought the long-running XRP lawsuit to a definitive end. This agreement involves Ripple paying a $50 million penalty, with a simultaneous return of $75 million in escrowed funds. Critically, the settlement confirms that Ripple's programmatic XRP sales are not classified as securities.
Following a joint filing on August 7th, dismissing appeals before the U.S. Court of Appeals for the Second Circuit, the SEC and Ripple formally finalized the dismissal on August 8th. The news was confirmed by Ripple's Chief Legal Officer, Stuart Alderoty, on X, declaring the case closed and signaling a return to business-as-usual. This resolution effectively clears the way for the release of $125 million held in escrow, allocated as a $50 million penalty to the U.S. Treasury and a $75 million refund to Ripple.
The settlement resolves the dispute stemming from a 2023 ruling by Judge Analisa Torres. While this ruling determined that institutional sales of XRP met the criteria for securities under the Howey Test, programmatic sales to retail investors were exempted. This partial victory for Ripple and the wider cryptocurrency community had significant implications, prompting the SEC and Ripple's initial appeals. In this final agreement, Ripple dropped its appeal challenging the ruling against its institutional sales, while the SEC withdrew its appeal concerning the programmatic sales. Both parties will bear their own legal costs.
The SEC's original December 2020 lawsuit alleged that Ripple raised $1.3 billion through unregistered securities offerings of XRP. Ripple vehemently denied these allegations, arguing XRP was not a security. The final settlement, however, leaves in place a permanent injunction on Ripple's institutional XRP sales. Despite this ongoing restriction, the market reacted positively to the resolution of the lengthy uncertainty, with XRP prices experiencing a significant surge of 12%. The dismissal signifies a major turning point for Ripple, allowing them to refocus on core business operations after this prolonged legal challenge. Information for this report was gathered from internet sources.
