$75M Win for Ripple as It Drops Cross-Appeal Against SEC
The announcement comes just days after the SEC also walked away from its appeal of the verdict from the same lawsuit filed more than four years ago.
In December 2020, the U.S. Securities and Exchange Commission (SEC) sued crypto firm Ripple Labs, the largest holder of XRP, for selling $1.3 billion worth of the token. But now, a little more than four years later, Stuart Alderoty, Ripple’s chief legal officer, says the legal dispute has been settled, and that Ripple even managed to recover $75 million of the $125 million fine that it had previously paid in 2024 as part of the judgment in the lengthy legal battle.
The lawsuit kicked off when the SEC accused Ripple of violating securities laws by selling XRP to retail investors and pocketing a cool $1.3 billion. But U.S. District Judge Analisa Torres disagreed with the regulator and handed a landmark legal victory to Ripple in 2023. However, the firm had also sold $728 million worth of the digital asset to institutional investors, an action Torres said was indeed in violation of securities regulation and for which she slapped Ripple with a $125 million fine, giving the SEC a partial win.
(U.S. District Judge Analisa Torres handed down a verdict that was a partial win for both Ripple and the SEC / image from law.com)
Both the SEC and Ripple appealed Torres’s decision, since neither organization had won the lawsuit outright, although Ripple appeared to have gained more from the verdict. Then, in a surprise move on March 19, just a few days ago, the regulator dropped its appeal, and on Tuesday, Ripple followed suit, as per Alderoty’s announcement.
“Last week, the SEC agreed to drop its appeal without conditions,” Alderoty said. “Ripple has now agreed to drop its cross-appeal. The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” he further explained.
The SEC has dropped multiple cases involving crypto firms ever since President Donald Trump’s pro-crypto administration was ushered in earlier this year. Acting SEC Chairman Mark T. Uyeda recently explained that his organization will now focus on providing regulatory clarity rather than using the regulation by enforcement approach favored by former chairman Gary Gensler.
“Explaining the Commission’s thought process through releases rather than enforcement actions should have been considered for classifying crypto assets under the federal securities laws,” Uyeda said at last week’s inaugural SEC Crypto Roundtable.