The prolonged legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) seems to be reaching a conclusion, as Ripple Labs CEO Brad Garlinghouse announced on Friday that the company intends to withdraw its cross-appeal in the case.
“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously stated,” Garlinghouse shared on social media. “We’re closing this chapter once and for all, and focusing on what’s most important – building the Internet of Value. Lock in.”
XRP increased slightly by 1.4% following the announcement.
This decision comes shortly after U.S. District Judge Analisa Torres of the Southern District of New York (SDNY) denied a joint request from the SEC and Ripple to approve a proposed settlement that would reduce Ripple’s civil penalty to $50 million and lift the permanent injunction against the company. The latter was identified as a key issue by Torres, who remarked:
“If the Court is not concerned about Ripple violating the law, why do the parties want to remove the injunction that tells Ripple, ‘Follow the law’?” Torres noted. “When the Court imposed the injunction, it did so because it found a ‘reasonable probability’ that Ripple would continue violating federal securities laws. This has not changed, nor do the parties claim that it has.”
The joint request was the second one rejected by Torres, following an earlier attempt in May that was denied due to jurisdictional and procedural issues. With the court showing no willingness to amend the terms of the settlement, Ripple’s choice to withdraw its cross-appeal effectively concludes the case by accepting the initially imposed civil penalty of $125 million while likely keeping the permanent injunction against the firm in place.
A spokesperson for Ripple Labs did not respond to requests for comment.
The SEC initially sued Ripple in 2020 under then-Chair Jay Clayton, claiming the company breached federal securities laws through its XRP sales. After extensive litigation, Torres concluded in a 2023 ruling that XRP sales to retail traders on public exchanges did not amount to securities transactions but found that XRP sales to institutional investors did, violating securities laws.
Leave a Reply