The prolonged legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is approaching a resolution as both parties engage in negotiations over the terms of an August court ruling, according to sources cited by FOX Business journalist Eleanor Terrett.
The case, initiated by the SEC in late 2020, accused Ripple of selling its cryptocurrency, XRP, as an unregistered security. The lawsuit had a significant impact on XRP’s value, keeping its price range-bound for years. Ripple has consistently defended its position, arguing that XRP should be classified as a digital currency rather than a security.
In a pivotal ruling last year, District Judge Analisa Torres of the Southern District of New York found Ripple’s institutional sales of XRP constituted unregistered securities offerings. As a result, Ripple was ordered to pay a $125 million penalty.
However, the court ruled that the company’s programmatic sales of XRP to retail investors did not violate securities laws. This partial victory was initially seen as a positive outcome for Ripple, especially as the SEC had originally sought nearly $2 billion in penalties.
SEC’s Changing Approach to Crypto Enforcement
Despite the ruling, recent developments in the SEC’s enforcement approach have raised new questions. The agency, under new leadership, has withdrawn multiple lawsuits against crypto firms, including cases against Coinbase, Kraken, Uniswap Labs, and OpenSea.
Additionally, the SEC has reached settlements with companies such as Consensys, leading to the dismissal of the securities enforcement case concerning MetaMask.
Ripple’s legal team is reportedly seeking to renegotiate aspects of the 2023 ruling, arguing that if the SEC is reconsidering its stance on enforcement actions against other crypto companies, Ripple should not be penalized for past regulatory uncertainty.
Settlement talks have been delayed as both sides negotiate the implications of the August ruling. Given the absence of clear legal precedent in similar cases, the resolution process is taking longer than anticipated.
The SEC, which appealed Torres’ ruling before former Chair Gary Gensler stepped down, remains in discussions over the final terms of the case.
Meanwhile, other high-profile crypto cases are seeing delays or temporary pauses. Binance and the SEC have filed a joint motion to halt their litigation for 60 days, and the agency has paused its civil fraud case against Justin Sun as both sides explore a settlement.
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