Ripple Labs and the US Securities and Exchange Commission (SEC) agreed to settle the lawsuit against Ripple, which has been going on since 2020, over the unregistered securities offerings of XRP token sales.
The settlement ends the four-year-long battle as Ripple agrees to pay a $50 million fine to the SEC instead of the earlier $125 million fine. The settlement is still subject to final approval at the SEC, so it’s yet to become official. However, Ripple Chief Legal Officer Stuart Alderoty has confirmed the settlement of the lawsuit and emphasized that Ripple does not admit any wrongdoing.
The Ripple vs SEC is one of the high-profile cases that everyone has been keeping an eye on, as the debate of crypto regulation in the US is one of the hot topics. Now that both parties have dropped their appeal, let’s see what happens with the settlement.
Settlement Agreement
The US Securities and Exchange Commission has accused Ripple Labs of unregistered securities over the sale of XRP tokens, which raised over $1.3 billion. The lawsuit commenced in December 2020, and the SEC argued that XRP should be classified as a security.
The long battle has led Ripple Labs to pay a fine of $125 million to the SEC for its unregistered securities, as the July 2023 ruling says XRP was sold directly to institutional investors, which violates the securities laws. Ripple later cross-appealed the settlement, though they had paid the $125 million fine to an interest account last year.
Now, as per the latest news, both parties have agreed to drop their appeal and settle the four-year-long lawsuit with SEC paying the $75 million back to the Ripple company and keeping the $50 million as the fine for their unregistered securities over XRP tokens. The Ripple Chief Legal Officer also says that they have asked the federal court to dismiss the ruling of XRP sales to institutions.
What’s Next?
As the Ripple Labs CLO confirms the settlement of the Ripple vs SEC lawsuit, however, he also emphasizes that the recent proposal agreement is still subject to formal approval at the SEC, and the drafting of the final agreement is still pending.
So, until the final drafting of the agreement is made and approved, we cannot say the settlement is official. As per the next processings, the SEC would take the Ripple Labs case to their next meeting, which can be held tomorrow. The SEC commissioners will vote on the appeal dismissal approval from the Ripple case before formally announcing it.
The final statement from the SEC will confirm the end of a lawsuit against Ripple over the XRP token sale. So, after the final statement from the SEC, both the involved parties will work to make the final resolution of the case with the court.
Crypto Analysts Reaction
Since Donald Trump came into power, the discussion of crypto regulation in the US has again become a hot topic. The Ripple and SEC lawsuit is one of the major crypto cases that may influence the crypto regulatory approaches. Now that Ripple is ending the battle with good news, many crypto analysts believe this will speed up crypto adoption.
Since the lawsuit, people have been wondering about the digital assets administration, and it can affect the crypto space intensively. As Ripple Labs says, they will adopt a different approach to sell XRP tokens to an institutional sector that comes under law and protects them from such cases.
Ripple confirms it will end the appeal of $728 million XRP sales to institutional clients should be under the securities laws. With the settlement, the XRP token sale or value in the crypto market may be affected.
Impact of Settlement
With the Ripple vs SEC settlement, the settlement will not only affect the XRP cryptocurrency, but it will also affect the overall crypto industry in the following ways:
- With the resolution to the lawsuit, the regulator’s boundaries on the digital assets would be positively impacted, and traders can expect favorable reforms for cryptocurrency in the future.
- Since the lawsuit, many crypto exchange platforms have delisted the XRP token, but now with the settlement in favor of Ripple Labs, the market value of the XRP can be improved, ultimately affecting the XRP holders. Currently, the XRP token costs $2.46, increasing with a rate of 1.08%.
- With the resolution of the settlement, the uncertainty related to the XRP token and cryptocurrencies would be diminished, and the confidence related to Ripple would boost among the crypto traders.
- With this settlement, one thing is clear: the cryptocurrency space needs clearer regulations to reduce the uncertainty related to the digital assets.
The resolution of Ripple vs SEC is a critical moment for the crypto industry, as the case can influence the regulatory steps towards digital assets and reduce the uncertainty related to cryptocurrency.