SEC and Ripple Conclude Legal Dispute with $125 Million Settlement Over XRP Sales

The U.S. Securities and Exchange Commission (SEC) has concluded its lawsuit against Ripple Labs Inc., resulting in the company agreeing to pay a $125 million fine. The legal case centered on allegations that Ripple's sales of the cryptocurrency XRP to institutional investors constituted unregistered securities offerings. As part of the resolution, Ripple exits the litigation but remains subject to an injunction.

The settlement allows Ripple to resume raising funds from institutional investors. The agreement marks the end of a prolonged legal battle between the SEC and Ripple, which had caused significant uncertainty in the cryptocurrency market. Specific details regarding the terms of the injunction were not disclosed in the announcement. This outcome also impacted XRP’s market performance, with its value rising following news of the settlement.

The U.S. Securities and Exchange Commission (SEC) and Ripple Labs have agreed to end their long-running legal dispute by mutually abandoning their appeals, which leaves intact a prior court ruling concerning the cryptocurrency XRP. The decision effectively concludes a case that has been ongoing since December 2020, when the SEC filed a lawsuit alleging that Ripple had conducted an unregistered securities offering by selling XRP.

The agreement to drop appeals means that neither side will challenge the July 2023 ruling by Judge Analisa Torres of the U.S. District Court for the Southern District of New York, which determined that XRP is not a security when sold to the general public on exchanges, but could be considered a security when sold to institutional investors. The ruling dealt a partial victory to both parties, though Ripple remained subject to certain legal remedies.

As part of the resolution, Ripple continues to face an injunction, details of which remain in place following the judgment. The SEC and Ripple's decision to end the appeals process brings procedural closure to the case without further litigation in higher courts.

The announcement of the case's conclusion had an immediate positive impact on XRP's market performance, with the cryptocurrency’s value surging. Market analysts attribute part of the price rally to increased institutional interest and the removal of legal uncertainty surrounding Ripple’s operations.

This legal closure marks an end to a nearly four-year dispute that has been closely watched by the cryptocurrency industry as a significant precedent for how U.S. regulators classify and pursue enforcement actions against digital asset issuers.

The U.S. Securities and Exchange Commission (SEC) and Ripple Labs have agreed to end their multi-year legal dispute over the cryptocurrency XRP by jointly requesting the U.S. Court of Appeals for the Second Circuit to dismiss both the SEC's appeal and Ripple's cross-appeal. Ripple's Chief Legal Officer, Stuart Alderoty, announced the filing on X (formerly Twitter) on Thursday, stating, “The end — and now back to business.”

The lawsuit began in late 2020, when the SEC sued Ripple in federal court, alleging the company sold XRP as an unregistered security. In July 2023, Judge Analisa Torres of the U.S. District Court for the Southern District of New York issued a mixed ruling: she determined that XRP sold on public exchanges did not qualify as a security, but that sales to institutional investors were unregistered securities transactions. Consequently, Ripple was ordered to pay $125 million in fines to the SEC, far less than the agency’s requested $2 billion.

The July 2023 decision prompted the SEC to file an appeal in October 2023, which Ripple countered with a cross-appeal. On April 2025, the SEC and Ripple filed a joint motion to pause these appeals after indications that both sides were prepared to drop their cases. In May 2025, they reached a settlement and asked Judge Torres to dissolve the injunction and reduce the fine, but she denied the request in June 2025, reiterating that Ripple must comply with federal securities laws.

With the dismissal of appeals, Judge Torres’s 2023 ruling remains final. The SEC initiated the suit during Donald Trump’s first term. Under Trump’s current administration, the agency has withdrawn several lawsuits against cryptocurrency firms.

The resolution of the case has been linked to a rally in XRP’s market price, which increased by nearly 99% from $1.79 on April 9, 2025, to $3.56 on July 22, 2025, according to CoinGecko. As of the latest report, XRP trades at $3.31, up 10.6% in the past day.

The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has entered a pivotal phase. On June 12, Ripple and the SEC filed a second joint motion requesting the U.S. Court of Appeals to release $125 million held in escrow. The motion seeks to lift the injunction prohibiting XRP sales to institutional investors and reduce the penalty imposed on Ripple. Judge Analisa Torres previously rejected the first motion on June 5, citing procedural errors and inadequate arguments that the settlement would serve the public and institutional investors. The legal community is divided on whether the second filing addresses Judge Torres' requirements, with some speculating a ruling could come as early as June 19. Procrypto lawyer Bill Morgan noted, 'It only took 7 days for Judge Torres to reject the last joint motion. Less than 7 days to decide the current joint motion may not be the best sign she will grant it.' The outcome of this motion could significantly impact XRP's market performance, with potential implications for pending XRP spot ETF applications. Meanwhile, XRP's price has been volatile, dropping from $2.5712 to $1.9998 amid market anxiety over the ruling. The SEC's appeal against the Programmatic Sales ruling, where Judge Torres ruled that programmatic sales of XRP did not satisfy the third prong of the Howey Test, remains a critical factor in the case. A favorable ruling for Ripple could expedite regulatory clarity for XRP, while an unfavorable one may intensify selling pressure.