Ripple Labs Agrees to Settle SEC Lawsuit, Agreeing to Pay a $50M Penalty

Ripple Labs is set to settle its long-running legal battle with the SEC, agreeing to a revised $50 million penalty—down from the original $125 million.

Ripple Labs is set to settle its long-running legal battle with the SEC, agreeing to a revised $50 million penalty—down from the original $125 million, and the SEC will return $75 million, pending final court and commissioner approval, according to a joint statement filed on Wednesday.

The move follows the SEC dropping its appeal of a 2023 ruling that found Ripple’s XRP retail sales didn’t violate securities laws, though institutional sales did.

The move follows the SEC dropping its appeal of a 2023 ruling that found Ripple’s XRP retail sales didn’t violate securities laws, though institutional sales did.

The agency also plans to lift the injunction currently in place.

The agency also plans to lift the injunction currently in place.

Ripple will also withdraw its own cross-appeal.

Ripple will also withdraw its own cross-appeal.

The regulatory clarity has sparked discussion about potential future XRP-based exchange-traded products (ETPs), with Nicolai Søndergaard, a research analyst at blockchain analytics firm Nansen, noting: "There is a higher chance of success for XRP futures or spot ETFs now."

However, analysts remain skeptical about XRP's upside in the context of the current stablecoin enthusiasm, particularly with Ripple's planned RLUSD stablecoin still awaiting broader adoption.

However, analysts remain skeptical about XRP's upside in the context of the current stablecoin enthusiasm, particularly with Ripple's planned RLUSD stablecoin still awaiting broader adoption.

"The XRP token won't necessarily benefit from it as much as Ripple the company would," Søndergaard told Benzinga. "It wouldn't be surprising if people invest in XRP expecting gains, but that doesn't guarantee utility-based growth."

Patrick Young, Head of GTM at Web3 platform Galxe, had a similar take.

Patrick Young, Head of GTM at Web3 platform Galxe, had a similar take.

"The current stablecoin bull market is no more than a few headlines around some sensational launches," he told Benzinga. "XRP has utility as an institutional tool, but the trend around stablecoins may be entirely irrelevant to it."

Despite a spike in price following the resolution of the SEC lawsuit, XRP has since struggled to build momentum.

Despite a spike in price following the resolution of the SEC lawsuit, XRP has since struggled to build momentum.

Young noted the token has remained "range-bound between $2.58 and $1.94," with decreasing volume and limited catalysts for near-term rallies.

Meanwhile, Jean Rausis, co-founder of DeFi platform SMARDEX, offered a critical view, noting that XRP's growth has little to do with the values underpinned by the broader decentralized movement.

Meanwhile, Jean Rausis, co-founder of DeFi platform SMARDEX, offered a critical view, noting that XRP's growth has little to do with the values underpinned by the broader decentralized movement.

"XRP is a centralized, pre-mined token, operated by Ripple validators… a financial tool for banks — not a symbol of decentralization," he said.

He went further, comparing XRP's market appeal to fast food: "Seeing the market capitalization of XRP increase is like watching a fast-food chain make more money than a Michelin-starred restaurant… it says nothing about quality or innovation."

As the SEC's softened stance on Ripple may boost investor sentiment, the analysts opine that XRP's future will be defined more by institutional utility than by retail-driven stablecoin hype.

As the SEC's softened stance on Ripple may boost investor sentiment, the analysts opine that XRP's future will be defined more by institutional utility than by retail-driven stablecoin hype.