The U.S. Securities and Exchange Commission (SEC) and Ripple have reached a joint agreement to withdraw their respective appeals, ending a five-year lawsuit. This case, which began in December 2020, has been a barometer for the regulatory direction of the crypto industry. The settlement significantly reduces legal barriers for XRP in the U.S., creating conditions for a price breakthrough above the key level of $4.80.
Ripple is required to pay a $125 million civil penalty, far lower than the SEC's initial demand of $2 billion, indicating a clear victory. A key ruling earlier in 2023 determined that Ripple's sale of XRP to institutional investors constituted a securities offering, but programmatic sales on exchanges do not constitute securities trading, laying the groundwork for negotiations.
The market reacted immediately, with XRP recently reaching a seven-year high. The elimination of legal uncertainties is expected to attract more institutional funds. This settlement not only benefits Ripple but also provides a reference for other projects facing similar regulatory pressures, reinforcing the legal distinction between programmatic sales and institutional sales.
With the lawsuit coming to a close, Ripple can allocate more resources to technology development and the expansion of the cross-border payment market, accelerating the return of business to the U.S. market. The warming regulatory environment also paves the way for a new phase in the industry.