Ripple Labs and SEC’s Legal Dispute
Ripple Labs and the U.S. Securities and Exchange Commission (SEC) are making renewed efforts to finalize their protracted legal dispute by submitting a collaborative application to a federal judge. This recent filing, dated June 12, aims to lift a judicial injunction and endorse a renegotiated settlement that amounts to $50 million in penalties. The entities have reached out to Judge Analisa Torres of the Southern District of New York for an indicative ruling on their proposal to annul the previous court order linked to a 2024 Final Judgment.
Proposed Settlement Details
In their joint motion, Ripple and the SEC have proposed allotting $50 million for a civil penalty while recovering an additional $75 million for Ripple. Should the court consent to this indicative ruling, both parties plan to seek remand from the U.S. Court of Appeals for the Second Circuit to formally address the decision in the lower district court.
This move comes after an earlier request made on May 8 was rebuffed by the court due to a lack of demonstration of “exceptional circumstances,” according to Rule 60(b) of the Federal Rules of Civil Procedure.
Background of the Legal Battle
The roots of this legal battle trace back to December 2020 when the SEC launched a lawsuit against Ripple, alleging violations of federal securities laws by trading XRP as an unregistered security. In July 2023, the court delivered a mixed ruling, granting partial favor to both parties. Subsequently, a final verdict issued in August 2024 resulted in a $125 million penalty and an order in September 2024 mandating Ripple to place 111% of that penalty amount into escrow.
After this ruling, the SEC filed for an appeal, prompting Ripple to counter with a cross-appeal. Their recent joint motion this past May aims to address these appeals and seek closure on all ongoing litigation. Both Ripple and the SEC’s latest appeal indicates their belief that new exceptional circumstances justify revisiting the injunction and penalty details.
Interpretation and Future Implications
This is part of a larger industry movement to clarify and alleviate regulatory ambiguities surrounding cryptocurrency. In an interesting development, if the SEC agrees to settle for a lesser penalty, it could signify a transformational shift in their approach to handling crypto-related enforcement, especially in the wake of mounting criticism toward their current strategies.
As of now, a decision on this renewed joint request has yet to be delivered by the court.
