The long-running legal standoff between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) may be heading toward a conclusion, as both sides jointly asked the Second Circuit Court of Appeals to keep their legal appeals paused. They aim to finalize a $50 million settlement and lift a previous injunction against Ripple.
Ripple and SEC Push for Closure
In a joint status update filed on Monday, the SEC and Ripple confirmed they’ve reached a settlement agreement in principle, pending final approval from the SEC. They requested the court to maintain the pause on their appeals until August 15, 2025, while they continue to work through the settlement terms with the trial court.
The deal, originally agreed to on May 8, would see Ripple pay $50 million—less than half of the $125 million penalty previously imposed. The remaining escrowed funds and any interest earned would be returned to Ripple, but only if U.S. District Judge Analisa Torres agrees to lift the permanent injunction issued in August 2024.
Judge Torres Initially Rejected the First Attempt
On May 15, Judge Torres denied the first motion for an indicative ruling, saying it didn’t meet the high legal standard required to modify final judgments. Ripple and the SEC submitted a new motion on June 12, this time with a 52-page memorandum. They argued that continuing the case would waste court resources and that dissolving the injunction is a key condition of the settlement. They also pointed to the SEC’s recent shift toward resolving crypto cases through settlements.
SEC’s New Approach Marks a Shift
This cooperative tone marks a departure from the SEC’s aggressive enforcement stance under former Chair Gary Gensler, who initiated the lawsuit in 2020. The case led to a partial win for the SEC in 2023 when Judge Torres ruled that Ripple’s direct sales of XRP to institutions violated securities laws—but not its broader sales to retail investors.
In August 2024, the court imposed a $125 million penalty and required Ripple to place 111% of that amount in an interest-bearing escrow. Both Ripple and the SEC appealed the decision in October 2024. The appeals process was paused in April 2025 after both parties expressed interest in settling.
What’s Next?
The success of this settlement now depends on whether Judge Torres agrees to lift the injunction and allow the reduced penalty. If she signals approval, the Second Circuit is expected to allow a limited remand so the lower court can formally update the judgment. If not, the appeals process—currently only active on the SEC’s side—could resume.
Ripple and the SEC emphasized that their proposed settlement aligns with the SEC’s recent moves to drop other crypto lawsuits and reflects a broader industry shift toward resolution over prolonged litigation.
