Ripple Labs has achieved a pivotal settlement with the US Securities and Exchange Commission (SEC) after enduring prolonged legal disputes concerning the classification of its cryptocurrency, XRP.

SEC Settlement Clarifies Ripple’s Position

On Thursday, the SEC announced details of the settlement involving Ripple Labs, CEO Brad Garlinghouse, and Executive Chairman Christian A. Larsen.

This agreement outlines a resolution for the civil enforcement case against them, offering Ripple much-needed clarity as it plans for the future.

A key aspect of the settlement involves both Ripple Labs and the SEC asking the district court to consider lifting the injunction placed on the payment company. 

This injunction resulted from a final judgment on August 7, 2024, which included a significant civil penalty of $125 million. In the settlement, Ripple will pay $50 million to the SEC, thereby resolving that part of the penalty, while the remaining funds will be returned to Ripple.

Future Steps for Both Parties

The settlement depends on the district court agreeing to lift the injunction and release the escrowed penalty funds.

Once this agreement is obtained, both parties will request a limited remand to the district court for the necessary modifications. They also intend to withdraw their appeals currently pending in the US Court of Appeals for the Second Circuit.

The SEC’s choice to settle does not reflect any evaluation of the claims against Ripple but is aimed at restructuring its regulatory approach to the cryptocurrency industry.

At the time of reporting, XRP is trading at $2.30, showing a 7% increase within the past 24 hours.