Ripple and the U.S. Securities and Exchange Commission (SEC) Have Officially Settled Their Case

While insiders at Ripple had hinted weeks ago that a deal was done, many in the crypto community were waiting for written confirmation from the SEC itself.

After months of legal battle and speculation, the U.S. Securities and Exchange Commission (SEC) has officially announced that it has reached a settlement agreement with Ripple to resolve its civil enforcement action. While insiders at Ripple had hinted weeks ago that a deal was done, many in the crypto community were waiting for written confirmation from the SEC itself.

The agreement will also resolve the Commission’s action against Ripple executives. However, the court had previously ruled in favor of the executives on one key legal issue, rendering any pending appeal moot.

The SEC sued Ripple in December 2020, alleging that the company sold unregistered securities to raise $1.3 billion. The agency claimed that Ripple’s XRP token should be considered a "security" under U.S. federal securities law.

As part of the settlement, Ripple will pay $50 million out of the original $125 million penalty. Both sides have also agreed to drop their appeals — but only if the court agrees to lift the injunction that has been placed on Ripple for months.

The legal teams from both sides are expected to file a stipulation of settlement with Judge Analisa Torres of the U.S. District Court for the Southern District of New York on Monday, December 18.

According to Attorney John Deaton, who has closely followed the case, it would be “absolutely shocking” if Judge Analisa Torres didn’t agree to lift the injunction, given that both parties have agreed to settle and the executives’ case has already been settled earlier.

Legal Experts Issue Clarification

Soon after the settlement details surfaced, rumors started spreading online that Ripple would be paying the $50 million fine using XRP, and that the U.S. government planned to hold XRP as part of a strategic reserve.

However, former SEC lawyer Marc Fagel quickly dismissed those claims. He clarified that the money is already in Ripple’s counsel’s custody in cash form, and once the court approves the deal, it will be paid to the SEC — not in XRP.

“The parties have agreed to recommend that the court vacate the injunction. It would be surprising if Judge Torres didn’t agree given that both parties have agreed to settle and the executives’ case has already been settled earlier. But it would be absolutely shocking if Judge Analisa didn’t agree to lift the injunction given the circumstances. Both parties have agreed to recommend that the court vacate the injunction. It would be surprising if Judge Torres didn’t agree given that both parties have agreed to settle and the executives’ case has already been settled earlier. But it would be absolutely shocking if Judge Analisa didn’t agree to lift the injunction given the circumstances.”

Attorney Bill Morgan also stepped in to address the false reports. He explained that the original fine amount was already placed in a USD account, and both parties have agreed on how it will be distributed according to the settlement terms.