Ripple Pays $50 Million to Settle SEC Case, Ends Legal Battle Over Institutional XRP Sales

• Ripple agreed to pay $50 million to end the SEC case over unregistered XRP sales to institutional investors.
• The SEC will keep part of the penalty while Ripple gets back $75 million from the escrow account.
• Ripple can restart XRP institutional sales after the SEC asks the court to lift the sales ban.

Ripple Labs has officially ended its long-running legal battle with the U.S. Securities and Exchange Commission (SEC) by agreeing to pay a $50 million fine. This settlement brings closure to a case that began in December 2020 and centered on whether Ripple’s XRP token sales to institutional investors violated U.S. securities laws. Both Ripple and the SEC have now dropped their appeals, which clears the way for a final resolution.

Earlier, a New York court had ruled that Ripple must pay a $125 million penalty for unregistered XRP sales. Ripple had already placed this amount into an interest-bearing escrow account. As part of the new agreement, the SEC will keep $50 million from this fund. The remaining $75 million will be returned to Ripple. This decision is still subject to final approval from the SEC’s commissioners and must go through standard court procedures before becoming official.

SEC filed the lawsuit , accusing Ripple of selling XRP without registration as a security to institutional investors. The court declared XRP sales on public exchanges to retail buyers as legal while maintaining the SEC’s previous agreement that XRP purchased by institutional investors violated securities laws. The court decision established crucial boundaries regarding which cryptocurrency activities do not need to follow security regulations. 

SEC Agrees to Lift XRP Sale Ban

As part of their agreement the SEC has committed to petition the court for a permanent injunction lifting. The permanent order previously prevented Ripple from making XRP sales to institutional investors. Ripple sought to fight the permanent injunction because it viewed the ban as suggesting they had committed something wrong. 

The revised agreement establishes terms that stop Ripple from having to face the permanent injunction. The approval will enable Ripple to start conducting institutional XRP sales again. The modifying change will play an essential role in future business operations primarily through on-demand liquidity services for the company.

The case termination indicates a significant shift in direction under the current SEC leadership. The SEC took a strong enforcement stance toward cryptocurrency under the leadership of former chair Gary Gensler . At the commencement of its legal action against Ripple, the SEC demanded a $2 billion fine. 

Under Acting Chair Mark Uyeda, the SEC has adjusted its stance by withdrawing support from several prominent cases. The SEC has stopped pursuing legal action against major crypto exchanges including Coinbase and Kraken. The new regulatory stance from the SEC seems to suggest they will provide clearer and more predictable rules for the crypto field.

Ripple Focuses on Future Growth

Despite the long legal battle, Ripple’s XRP token remained mostly stable in the market. At press time, XRP traded at $2.45, showing only a minor 0.83% increase. This suggests that investors had already priced in the outcome. 

Now that the case is settled, Ripple is expected to focus on rebuilding and expanding its U.S. operations. The end of the lawsuit removes key legal risks and opens the door for further business activity. The final steps will involve completing standard court and Commission procedures.