Breaking: Ripple Settles with SEC for $50 Million; Commissioner Crenshaw Slams Decision
- Ripple Labs and its executives, including CEO Brad Garlinghouse and Executive Chairman Chris Larsen, will pay $50 million in a settlement with the SEC, as announced on Thursday.
- SEC Commissioner Caroline Crenshaw denounces the settlement, deeming it a retreat from crypto enforcement and a blow to investor protections.
- The settlement comes amidst dropping crypto cases under the Trump-era SEC leadership.
The Art, Fashion, and Entertainment Hub: Decrypt's SCENE
SEC Commissioner Crenshaw Criticizes Ripple Settlement, Questions Direction of Agency During Trump Administration
Commissioner Crenshaw has publicly criticized the SEC's decision to settle with Ripple, stating it drastically weakens crypto enforcement and leaves investors vulnerable.
"This settlement undermines the court's role in interpreting securities laws," Crenshaw remarked in a statement. "It's a disservice to the investing public."
According to the SEC, Ripple raised funds through the unregistered sale of XRP tokens and withheld vital disclosures from investors. The case, initially filed in 2020 under Jay Clayton's leadership, served as the foundation for the SEC's crypto crackdown.
In court, it was determined that Ripple had violated securities laws during institutional sales of XRP. However, their programmatic sales to retail investors were found to be compliant. The initial penalty sought by the SEC was $2 billion, but it was later reduced to $125 million in civil penalties last year.
Thursday's agreement nullifies this penalty, restoring over $75 million held in escrow to Ripple and lifting the prior injunction. The adjustment in penalties has raised concerns from Crenshaw, who argued the agency is abandoning already-achieved court victories in favor of potentially undefined future rule changes.
Crenshaw also cautioned that the deal may compromise the SEC's credibility, as attorneys are being asked to adopt legal positions contradicting previous stances.
Crenshaw, a skeptic of crypto, previously dissented against the agency's January approval of spot Bitcoin ETFs. Her recent remarks underscore the growing internal disagreement within the SEC regarding its stance in the rapidly evolving regulatory landscape for digital assets.
XRP, Ripple's native token, holds a market cap of over $132 billion. At the time of writing, XRP is up 6.5% on the day to $2.31, according to CoinGecko data.
Sources
- SEC Settles with Ripple for $50 Million, Criticized by Commissioner Crenshaw
- Commissioner Crenshaw Condemns Ripple Settlement as a Retreat from Enforcement
- Ripple Settlement Scrutinized by SEC Commissioner's Dissenting Voice
- Ripple's Settlement with the SEC: A Closer Look at the Deal and Its Implications
- SEC Enforcement Shake-up: Implications for Ripple and the Crypto Space
Edited by Sebastian Sinclair
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- Despite SEC Commissioner Crenshaw's criticism, Ripple Labs and its executives will pay a settled fine of $50 million for violating securities laws in the unregistered sale of XRP tokens, as announced on Thursday.
- The settlement with Ripple is deemed a retreat from crypto enforcement by SEC Commissioner Crenshaw, who believes it weakens investor protections and leaves the crypto market vulnerable.
- The dropping of crypto cases under the Trump-era SEC leadership has recently resulted in the SEC's settlement with Ripple, prompting concerns amidst the regulatory landscape for digital assets.
- In the Art, Fashion, and Entertainment Hub: Decrypt's SCENE, Crenshaw voiced her opinion that the settlement undermines the court's role in interpreting securities laws and is a disservice to the investing public.
- In the court case initially filed in 2020 under Jay Clayton's leadership, it was determined that Ripple had violated securities laws during institutional sales of XRP; however, their programmatic sales to retail investors were found to be compliant.
- The adjustment in penalties for Ripple, which nullifies the previously sought $125 million in civil penalties and restores over $75 million held in escrow, has raised concerns from Crenshaw that the agency is abandoning already-achieved court victories in favor of potentially undefined future rule changes.
