Securities and Exchange Commission Submits Registration Statement for Settlement with Ripple Labs Inc.
Ripple and SEC Settle Their Legal Battle
In a ~letter to Judge Analisa Torres of the United States District Court for the Southern District of New York (SDNY), the U.S. Securities and Exchange Commission (SEC) has finalized a settlement agreement with blockchain company Ripple.
The SEC's letter requests an indicative ruling from Judge Torres, following the pause of the appeal by the Second Circuit to allow the parties to complete the settlement process.
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Once the district court approves the settlement and the case is remanded back to the district court, the court can formally endorse the settlement. At that point, Ripple and the SEC will be able to drop their appeals voluntarily.
According to the settlement terms, Ripple's penalty will be reduced to just $50 million, down from the initial $125 million. The remaining $75 million will be returned to Ripple from the escrow account. The injunction imposed by Judge Torres in August last year will also be lifted.
The district court will indicate its willingness to dissolve the injunction and change the penalty only if the jurisdiction is shifted from the Court of Appeals. The parties have agreed not to make any changes to Judge Torres's summary judgment order from July 2023, which stated that programmatic XRP sales were not securities, but Ripple did violate securities laws with its institutional XRP sales.
XRP has risen by 7.2% over the past 24 hours, as per CoinGecko data.
The settlement between Ripple and the SEC involves several key components:
- Financial Settlement: Ripple will pay the SEC $50 million, with the remaining $75 million being returned from an escrow account.
- Injunction Lifting: The injunction imposed by Judge Torres will be lifted, terminating existing restrictions on Ripple’s operations.
- Court Procedures: The district court needs to formally approve the settlement, and the parties have agreed not to seek modifications of Judge Torres's summary judgment order from July 2023.
- Appeal Dismissal: Both Ripple and the SEC will drop their appeals after the settlement is finalized.
This settlement might signify a significant conclusion to one of the most prominent legal battles in the crypto sphere, potentially influencing future SEC lawsuits and the digital asset regulatory landscape.
- The settlement agreement between Ripple and the SEC, as detailed in a letter to Judge Analisa Torres, includes a financial penalty of $50 million for Ripple, with the remaining $75 million to be returned from an escrow account.
- After the district court approves the settlement, the court can formally endorse the agreement, allowing Ripple and the SEC to voluntarily drop their appeals.
- The injunction imposed by Judge Torres in August last year will be lifted once the settlement is finalized, ending existing restrictions on Ripple’s operations.
- The parties have agreed not to seek modifications of Judge Torres's summary judgment order from July 2023, which stated that programmatic XRP sales were not securities, but Ripple did violate securities laws with its institutional XRP sales.
- The legal battle between Ripple and the SEC, once settled, could be a significant influence on future SEC lawsuits and the digital asset regulatory landscape in the technology-driven business of finance, particularly in regards to stablecoins and bitcoin.
