Ripple has concluded its dispute with the SEC. This is big for the crypto sector, which has been closely tracking the case. The settlement is set to significantly affect how cryptocurrencies are regulated, bring clarity to the industry, and potentially change how firms like Ripple function in the future.
In December 2020, the SEC claimed the firm generated over $1.3 billion by selling XRP without registering it as a security, which led to the SEC suing Ripple. However, the firm stood its ground, stating that XRP is not a security but a digital currency used for payments. The lawsuit prompted XRP’s price to plummet substantially, and several exchanges delisted the token.
Ripple pushed back by citing earlier SEC pronouncements that appeared to corroborate its perspective. The case proved critical for crypto regulations and how businesses may raise money lawfully.
Ripple and Terms of the Settlement
Ripple’s recent settlement with the SEC marked a significant turn in the legal battle. The SEC originally requested $2 billion in penalties, but after months of discussions, the court ordered Ripple to pay $125 million in 2024. The recent deal involves the return of $75 million, giving some respite for the company’s finances.
In addition to the decreased fee, the crypto giant successfully negotiated the removal of an injunction that had limited its ability to sell XRP to institutional investors. This ruling permits Ripple to restart its activities without substantial legal obstructions, potentially paving the way for possible XRP-related products like ETFs.
Stuart Alderoty, Ripple’s chief legal officer, said on X (Twitter) that this would be his last update on SEC vs. Ripple.
“The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple.”
Ripple’s settlement with the SEC relaxes limits on XRP sales, potentially paving the way for XRP-based ETFs. Investor confidence has improved, leading to increasing trading volumes. XRP saw its price stabilize around $2.45 after the announcement. Ripple remains tied to over 300 financial institutions, preparing the business for worldwide development and growth.
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