The XRP community was set abuzz following a major announcement from Ripple’s Chief Legal Officer, Stuart Alderoty. According to a tweet from Alderoty, Ripple has agreed to drop its cross-appeal against the Securities and Exchange Commission (SEC), effectively ending a lawsuit that had stretched over four years.
This development marks a significant legal victory for Ripple and has sparked renewed enthusiasm among XRP holders. Notably, this comes shortly after Ripple’s CEO, Brad Garlinghouse, announced last week that the commission had agreed to end its lawsuit.
The SEC initially filed the lawsuit in December 2020, accusing Ripple of conducting unregistered securities sales through its XRP token. The legal dispute reached a turning point in August 2024 when Judge Analisa Torres ruled that Ripple’s XRP sales to institutional investors did breach securities laws.
However, the court concluded that XRP sales to retail investors on exchanges did not meet the definition of securities.
Although Ripple was fined $125 million, the SEC had sought a much larger penalty of $2 billion. The agency later appealed parts of the ruling but has withdrawn that appeal as part of the mutual settlement with Ripple.
Also Read: Ripple vs. SEC: Here are Possible Important Updates to Expect This Week
Key Settlement Terms and What They Mean for XRP
As part of the agreement, the SEC will keep $50 million of the original fine. The remaining $75 million will be returned to Ripple after being held in an interest-bearing escrow account during the appeal process.
Additionally, the SEC also plans to request the court to lift a previous injunction placed on Ripple’s operations. A final approval must come from a Commission vote, followed by court approval to develop official documents.
This update from Ripple’s top legal executive has been met with widespread excitement across the XRP ecosystem. The XRP community associates this development with substantial market progress as Ripple seeks to expand operations while enabling XRP market potential growth.
Besides resolving a high-profile case, the conclusion of this lawsuit offers regulatory clarity that may benefit the broader digital asset industry. The resolution will determine how law enforcement handles future actions and what categories U.S. law provides for tokens.
The end of the legal battle marks a fresh start for Ripple and its XRP token. The company can now focus on its business goals without the weight of regulatory uncertainty.
