It's Been Years of Back and Forth, and the SEC-Ripple Case May Be Wrapping Up Soon

Citing “two well-placed sources,” FOX Business journalist Eleanor Terrett reported late Wednesday that the four-year-long case is nearly wrapping up.

The U.S. Securities and Exchange Commission (SEC) is reportedly still in talks with Ripple to settle the lawsuit, and it may soon come to an end after four years of legal battles.

Citing “two well-placed sources” familiar with the matter, FOX Business journalist Eleanor Terrett reported late Wednesday that the case is nearly wrapping up. Over the past couple of weeks, the SEC has abandoned numerous lawsuits against crypto companies without even a slap on the wrist. These include Coinbase (NASDAQ:COIN), Gemini, Robinhood (NASDAQ:HOOD), Uniswap Labs, Kraken, and OpenSea, among others. However, the SEC-Ripple case remains unresolved.

According to Terrett, the lawsuit is “in the process of wrapping up” as both sides negotiate the details of the August district court ruling.

Sources told Fox that Ripple’s legal team is trying to renegotiate parts of a landmark 2023 ruling by U.S. District Judge Analisa Torres. That decision ordered Ripple to pay a $125 million penalty for its institutional XRP sales, which the court considered unregistered securities offerings while sparing the enterprise blockchain company the absurd $2 billion fine the SEC had requested. The SEC appealed Torres’s ruling shortly before ex-chairman Gary Gensler’s departure.

After announcing its plans to appeal the ruling in May 2023, the SEC dropped the case in June, paving the way for the case to be closed. However, the case dragged on as the parties engaged in settlement negotiations.

Earlier this month, the SEC dropped its case against crypto exchange Coinbase after a five-month legal battle. The regulator also closed its probe into Gemini, a cryptocurrency exchange co-founded by Cameron and Tyler Winklevoss, and dropped an antitrust lawsuit against OpenSea.

The developments come amid a broader shift in the SEC’s approach to cryptocurrency regulation. New chairman Robert Tracey has expressed interest in using a "rational" and "pragmatic" approach to crypto regulation, which could lead to more favorable terms for crypto companies.

While the lawsuit has been a major distraction for Ripple and its CEO Brad Garlinghouse, it also brought some attention to XRP, and it is now the fifth largest cryptocurrency by market capitalization.

If the SEC is rolling back its actions and giving other crypto-related companies a fresh start, then it should also not penalize Ripple based on the agency’s previous lack of regulatory clarity.

Legal pundits previously offered similar views. As ZyCrypto recently reported, prominent crypto lawyer James Murphy suggested that the delay in resolving the protracted suit might not be entirely due to the SEC. In his opinion, Ripple was actively negotiating with the regulatory agency to have some aspects of Judge Torres’s August ruling vacated.

According to Murphy, while the ruling was broadly seen as a big win for XRP investors, the injunction is problematic for Ripple as it could hamper the company from realizing future plans, such as a public market debut.

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