SEC and Ripple Seek Court Approval on $125M Fine Deal to End Long-Running Legal Battle
The U.S. Securities and Exchange Commission (SEC) and Ripple Labs are making a renewed push to close the books on their nearly five-year legal fight. In a joint court filing on Thursday, both parties urged a federal judge to approve a $125 million settlement agreement that would split the financial penalty and dissolve an injunction against Ripple.
Filed in the U.S. District Court for the Southern District of New York, the motion proposes sending $50 million of the total fine to the SEC, with the remaining $75 million staying with Ripple. The request comes after Judge Analisa Torres previously rejected a bid for an indicative ruling, stating that any request to vacate an injunction must meet a high legal standard and show “exceptional circumstances.”
Now, Ripple and the SEC argue that those conditions have been met.
“Doing so would promote efficiency and the policy favoring settlements, obviate the need for additional litigation… and be consistent with the SEC’s recent actions in other crypto registration cases,” the joint filing reads.
The Backstory
The SEC first sued Ripple in late 2020, accusing the company of raising $1.3 billion through the sale of XRP — which the agency claimed was an unregistered security. In a significant 2023 decision, Judge Torres ruled that Ripple’s “programmatic” sales of XRP, conducted through blind bid processes on exchanges, did not violate securities laws. However, she found that direct sales to institutional investors did qualify as securities transactions.
This partial win for both sides left the remaining issue: the penalty. The court determined Ripple owed $125 million for those institutional sales, which both parties are now seeking to finalize through the proposed split.
Changing Winds at the SEC
The recent push for resolution comes amid broader shifts in the SEC’s approach to crypto under new leadership. Since former Chair Gary Gensler stepped down in January, the agency has dropped several enforcement cases and launched a crypto-focused task force to reassess its regulatory stance. Both Ripple and the SEC referenced these developments in their filing as justification for modifying the final judgment.
“There are 'exceptional circumstances' beyond the Settlement Agreement itself,” the lawyers argued, pointing to the SEC’s evolving crypto posture and the value of conserving resources through a negotiated outcome.
Ripple CEO Brad Garlinghouse previously stated that the legal battle was “effectively over” after the SEC declined to pursue an appeal earlier this year. The remaining point of contention has been the structure and finalization of the fine.
What's Next?
The court has yet to issue a decision on the latest filing. If approved, it would mark the end of one of the most closely watched crypto enforcement cases in U.S. history — a case that has had wide implications for how digital assets are treated under securities laws.