Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have officially reached a settlement agreement, paving the way to close the historic lawsuit that has lasted since 2020 — if approved by the court.
According to the filings submitted to the federal court in New York on Thursday, both parties agreed to a penalty of 50 million USD. This figure is part of the 125 million USD penalty imposed by Judge Analisa Torres of the Southern District of New York last year, and represents only a tiny fraction of the initial 2 billion USD penalty proposed by the SEC.
In the 2023 ruling, Judge Torres determined that Ripple violated securities laws when selling XRP to institutional investors, but did not violate by allowing the buying and selling of XRP on exchanges for retail investors. The lawsuit was initiated by the SEC in 2020, under Chairman Jay Clayton — who currently serves as the acting U.S. Attorney at SDNY.
Under Chairman Gary Gensler, the SEC had appealed Judge Torres' ruling, forcing Ripple to respond with a cross-appeal. However, according to the new agreement, both parties will simultaneously withdraw their lawsuits, officially ending the dispute. The filing submitted on Thursday confirms the announcement in March from Ripple that they had reached a principle agreement with the SEC.
This agreement comes amid the SEC's mass withdrawal from investigations and lawsuits related to cryptocurrency launched during Gensler's tenure. Since President Donald Trump took office in January and appointed Paul Atkins — a crypto-friendly figure — as the new Chairman of the SEC, the agency has significantly changed its stance on regulating the crypto industry.
Immediately after the news, the price of XRP rose by 8%, extending its recovery over the past 24 hours.