Popular crypto payments company Ripple reaches an agreement with the SEC to dismiss its cross-appeal challenging the regulator’s partial court victory.
Ripple’s CLO Stuart Alderoty revealed the development yesterday in a tweet, which he characterized as his ‘last update on the lawsuit ever.’
Recall that Ripple filed its cross-appeal weeks after the SEC submitted an appeal notice to the Second Circuit. At the time, the company challenged the court’s declaration that its institutional sales were securities.
The firm was essentially looking to overturn a ruling that saw Judge Analisa Torres slam a $125 million fine against it, alongside an injunction prohibiting future institutional sales.
Terms of Ripple’s Agreement with SEC
With Ripple dropping its cross-appeal, it agreed to pay only $50 million as a fine to the SEC instead of the $125 million Judge Torres initially ordered. Notably, Ripple had deposited the complete $125 million cash to an interest-bearing account last year, pending the final resolution of the lawsuit.
Based on the agreement, Ripple will pay $50 million to the SEC, while the remaining $75 million will return to the company. Further, Alderoty mentioned that the SEC would ask the federal court to dismiss the permanent injunction on Ripple’s future XRP sales to institutions.
Meanwhile, the Ripple CLO stressed that the latest agreement is subject to formal approval at the SEC, usual court processes, and the drafting of final documents before the settlement becomes official.
Next Actions
As previously reported, the SEC could discuss the Ripple case at its upcoming closed meeting tomorrow. At the meeting, SEC commissioners will likely vote to approve the appeal dismissal, with an official announcement to follow suit.
This statement will confirm the end of the Ripple lawsuit, which has lingered for more than four years. After the statement, the parties will work with the court to make the resolution official.
Crypto Enthusiasts React
In the meantime, the broader crypto community has been commending Ripple for reaching favorable settlement terms with the SEC. This includes paying a lower fine and having the SEC lift the permanent injunction, which would allow it to sell XRP to U.S. institutions.
According to Attorney Bill Morgan, Ripple might adopt a different approach in selling XRP to U.S.-based institutional clients–one that differs from its previous strategy, which constituted investment contracts.
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