The prolonged legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) has seemingly reached its conclusion, as Ripple Labs CEO Brad Garlinghouse announced on Friday that the company will be dropping its cross-appeal in the case. Garlinghouse stated, "Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they've previously said.
We're closing this chapter once and for all, and focusing on what's most important – building the Internet of Value. The news prompted a modest 1.4% increase in XRP's value. This development comes on the heels of U.S.
District Judge Analisa Torres of the Southern District of New York (SDNY) rejecting a joint request from the SEC and Ripple to approve a proposed settlement agreement. The agreement would have reduced Ripple's civil penalty to $50 million and lifted the permanent injunction against the firm. However, Judge Torres expressed concerns that removing the injunction would undermine the law, as it was initially imposed due to a 'reasonable probability' that Ripple would continue to violate federal securities laws.
The SEC initially sued Ripple in 2020, alleging that the company had violated federal securities laws through its sales of XRP. After extensive litigation, Judge Torres ruled in 2023 that while sales of XRP to retail traders on public exchanges did not constitute securities transactions, sales to institutional investors did indeed violate securities laws. By withdrawing its cross-appeal, Ripple effectively accepts the initial civil penalty of $125 million and the permanent injunction against the firm.