Ripple Reaches Settlement with US SEC, Agrees to Pay $50 Million Fine

Highlights:

• The SEC presented a settlement filing to terminate its legal battle with Ripple and its executives.
• Under the settlement, Ripple will only pay $50 million out of an earlier $125 million imposed penalty.
• The US SEC and Ripple also agreed to drop appeals against each other.

A new court filing has revealed a joint agreement between the United States Securities and Exchange Commission (SEC) and Ripple, together with its executives: Brad Garlinghouse, Ripple’s Chief Executive Officer (CEO), and Chris Larsen, the payment platform’s co-founder. The agreement, submitted to Judge Analisa Torres in the Southern District of New York, ends the legal dispute that began in December 2020 when the SEC charged Ripple for unregistered XRP sales.

It’s over. https://t.co/cSkiIDDkuF

— John E Deaton (@JohnEDeaton1) May 8, 2025

Both parties agreed that Ripple would pay only $50 million out of the initial $125 million fine the SEC had imposed on the payment firm. The remaining $75 million from an escrow account funded at 111% of the penalty will be returned to Ripple. The US regulatory body and Ripple also sought the court’s approval to dissolve an August 2024 injunction imposed on Ripple for violating Section 5 of the 1933 Securities Act.

The court document read:

“As in the above decisions the court should grant the SEC’s and Ripple’s joint motion and issue an indicative ruling that the Court would, upon said parties’ motion, dissolve the injunction currently in place against Ripple and order the escrowed funds be distributed per the Settlement Agreement ($50 million to the SEC, the remainder to Ripple).”

Beyond the settlement details above, both parties agreed to dismiss their appeals in the Second Circuit Court of Appeals. For context, the SEC had initially filed an appeal against the payment firm, countering Judge Analisa Torres’s ruling that gave Ripple a partial victory two years ago.

Last year, Ripple also filed a lawsuit, appealing the $125 million fine. These appeal actions have hindered an amicable agreement in the protracted legal dispute. If the court approves the settlement request, a limited remand from the appeal court becomes necessary to finalize the legal dispute.

Resolution Waivers from Both Parties

Both parties agreed to permanently close the case. Ripple, Garlinghouse, and Larsen will forfeit every right to challenge the SEC in a similar case. In addition, the SEC will not refund Ripple’s court case expenses.

Ripple and the SEC have agreed to preserve the court’s July 2023 ruling, which found that Ripple’s institutional XRP sales violated securities laws, while its programmatic and secondary sales did not. The settlement ensures that neither party will challenge or seek to overturn this ruling. This decision confirms that XRP does not automatically qualify as a security asset, but its sales method must comply with U.S. securities regulations.

SEC Commissioner Criticises the SEC Vs. Ripple Settlement Push

In a May 8 statement, SEC Commissioner Caroline A. Crenshaw disagreed with the SEC’s settlement agreement basis. The commissioner highlighted three instances depicting how the settlement undermined US crypto enforcement actions.

SEC Collision: Ripple Settlement Sparks Outcry from Within

In a surprising move, the SEC and Ripple seek to dissolve an August 2024 injunction, sparking backlash from SEC Commissioner Caroline Crenshaw. She criticizes the proposed settlement as damaging to regulatory credibility… pic.twitter.com/9RHrKa9XQS

— Klaus AI Agent (@Klaus_Agent) May 9, 2025

First, she argued that the settlement would weaken the court’s ruling, invariably favouring Ripple despite being guilty of violating security regulations. Second, she stated that the SEC is gradually destroying the basis of its regulatory enforcement actions, creating many loopholes amid efforts to establish friendly regulatory guidelines.

Finally, Caroline argued that the settlement would leave investors confused and unprotected. While the commissioner might have raised strong reasons to back her claims, the final decision will rest on the court, signaling a possible near conclusion of the protracted SEC vs. Ripple court battle.