TLDR
- The SEC and Ripple have filed a settlement, possibly ending the XRP lawsuit.
- The settlement includes $125 million in penalties, with $50 million to the SEC and $75 million to Ripple.
- The SEC won’t challenge the court’s ruling on XRP sales not being securities.
- Despite the settlement, lawyer Bill Morgan says the case isn’t officially over yet.
In a major development that could bring the long-running XRP lawsuit to a close, the U.S. Securities and Exchange Commission (SEC) has filed a formal settlement letter in its case against Ripple Labs.
The letter, dated May 8, 2025, and publicly shared by legal analyst James K. Filan, represents the most pivotal moment in the case since it began in December 2020, marking yet another significant milestone for the XRP community.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: The @SECGov has filed the Settlement Agreement Letter. https://t.co/eXuWjyQECc
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) May 8, 2025
SEC-Ripple Settlement Was “In Good Faith”
Notably, for over four years, Ripple has fought the SEC’s claim that it unlawfully raised $1.3 billion through the sale of XRP in what the regulator classified as an unregistered securities offering. The lawsuit quickly evolved into a defining issue for crypto regulation, drawing global attention from investors, developers, and policymakers alike.
Now, after extended litigation, the SEC and Ripple appear to have reached a settlement agreement. According to the letter, both parties “engaged in good-faith negotiations to resolve this litigation in its entirety.” The agreement, executed on May 8, received the necessary internal approvals from the SEC.
At the core of the settlement is the release of $125 million in civil penalties currently held in escrow. Under the terms, $50 million will be paid to the SEC, while the remaining $75 million will be returned to Ripple.
The letter describes the deal as “a final resolution as to the conduct alleged in the amended complaint,” and importantly, notes that neither side plans to challenge the court’s previous Summary Judgment Order, a partial win for Ripple that confirmed XRP sales on secondary markets were not securities transactions.
Crucially, the SEC argues that the agreement satisfies the legal criteria for enforcement resolutions. Citing various precedents, the agency asserted that approval is appropriate when a settlement is “fair and reasonable,” and not contrary to public interest.
Meanwhile, the agency has requested an indicative ruling from the court, arguing that such an order would “promote efficiency and the policy favoring settlements,” and would eliminate the need for further litigation at both the district and appellate levels. This language reinforces both parties’ commitment to closing a high-stakes legal chapter that has shaped the crypto landscape.
Court Ruling Crucial for Last Milestone
That said, the court’s response will be decisive. Should the judge issue the indicative ruling, it would enable both Ripple and the SEC to formally drop their appeals, dissolve the standing injunction, and release the escrowed funds according to the settlement’s terms. Beyond bringing long-sought clarity to Ripple and its stakeholders, the case could serve as an informal precedent for how future crypto token disputes are handled in the U.S.
Earlier this month, Ripple Chief Legal Officer Stuart Alderoty expressed strong optimism about the lawsuit’s conclusion.
“The SEC not only dropped its appeal against Ripple—they’ve now dropped every case against every crypto company in the United States. Why? Because the SEC has now admitted what we’ve always been saying: you can’t bring enforcement actions without first explaining what the law is.” He stated. “We never had clear laws, rules, or regulations regarding crypto in this country. So now we’re going to clean up the mess, get out of the courtroom, get back to business.”
However, despite the fanfare surrounding the development, some uncertainty remains. On Wednesday, pro-XRP lawyer Bill Morgan emphasized that the case is not yet officially over. His remarks dampened growing optimism among XRP holders, who had already begun celebrating what they perceived as Ripple’s legal victory
As the crypto world watches closely, the final ruling could cement a historic moment not only for Ripple but for the broader regulatory treatment of digital assets in the United States.
