A wave of internal conflict has struck the U.S. Securities and Exchange Commission (SEC) following a proposed settlement with Ripple Labs. The agency has asked a federal court to approve the deal, which would end the legal battle that began in December 2020.
In a court filing on May 8, the SEC and Ripple agreed to dismiss their appeals at the Second Circuit Court of Appeals. Ripple would receive back a total of $75 million from the $125 million held in escrow, and the SEC would collect the rest as a civil penalty.
The case was built up on a 2023 judgment of Judge Analisa Torres that XRP sales to the public exchanges did not break securities laws. However, she found that institutional token sales were a securities violation. The settlement keeps this ruling intact, with both parties agreeing not to challenge or amend the judgment.
Also Read: XRP to the Moon? Major Ripple-SEC Update Boost Price – Here’s What Happened
Crenshaw’s Dissent Raises Questions About SEC’s Direction
SEC Commissioner Caroline A. Crenshaw has voiced sharp opposition to the settlement, calling it harmful to investor protections. In a statement on the SEC’s website, she warned that the agreement might weaken the agency’s ability to enforce rules against crypto firms.
Crenshaw expressed concern that Ripple could resume selling XRP to institutions without registering the token. She also criticized what she perceives as a dearth of deterrence, describing that the deal may encourage noncompliance throughout the crypto industry.
Her dissent highlighted concerns about a potential shift in the SEC’s enforcement approach. According to her, the agency may be stepping back from its previously firm stance on crypto regulation, and possibly leave investors and market participants vulnerable.
This development has sparked industry speculation about whether the SEC’s broader crypto strategy is changing.
Ripple Case Outcome Could Shape Future Crypto Oversight
The SEC has defended the proposed agreement, stating that it delivers fair results and offers legal clarity to the market. Officials believe the court’s previous ruling helped define the rules around digital asset transactions.
If approved, the settlement would formally close one of the most followed crypto lawsuits in recent history. However, the disagreement within the SEC suggests that similar regulatory challenges could surface again.
With pending court approval, the future of SEC crypto enforcement remains uncertain. Crenshaw’s objections may signal deeper divides that could influence future actions.
Also Read: Crypto Market Roars Back: Bitcoin Leads $3.35 Trillion Surge
