Settling the Score: Ripple and SEC's Protracted Battle
SEC Proposes $50 Million Settlement with Ripple in XRP Legal Dispute
SCENE The long-drawn-out feud between the Securities and Exchange Commission (SEC) and Ripple Labs has finally reached its conclusion, some four years after the watchdog took Ripple to court.
In a surprising turn of events announced yesterday, the SEC and Ripple executives, including CEO Brad Garlinghouse and Executive Chairman Chris Larsen, will collectively pay $50 million to settle the case. This agreed-upon settlement was initially disclosed by Ripple in March.
Initially, under former SEC Chair Gary Gensler, the SEC had asked for a whopping $2 billion fine. However, the court ordered Ripple to pay a $125 million penalty in 2022. As per the settlement agreement filed with the court, $50 million will go to the SEC, with the remaining $75 million plus change being returned to Ripple, subject to court approval.
Decrypt was unable to get a comment from Ripple.
The SEC's lawsuit was initiated in 2020, alleging that Ripple sold unregistered securities in the form of XRP to investors in order to raise funds. However, in 2023, a judge ruled that programmatic sales of XRP on cryptocurrency exchanges to retail investors were not considered securities. Even though the judge also deemed $700 million worth of tokens for institutional sales as unregistered securities sales, the ruling was celebrated by both Ripple and the crypto industry.
In recent times, the SEC under its new leadership has adopted a softer stance towards the crypto space, abandoning a series of lawsuits and investigations. This shift in approach can be traced back to President Donald Trump's campaign promises to aid the crypto industry.
XRP Price SoarsXRP, the fourth-largest cryptocurrency with a market cap of over $132 billion, is a digital coin created by Ripple's founders and used for their payment services. Following the settlement news, the price of XRP surged, currently trading at $2.30, a rise of more than 8% over a 24-hour period, according to CoinGecko.
Source:[1][2][3][4][5]
References:[1] Ripple's Legal Battle with the SEC Ends in a Settlement. (2023). Retrieved from https://www.atmmarketplace.com/newsroom/ripple-settles-with-sec-to-end- lungs-lawsuit-over-xrp/
[2] SEC Settles Case Against Ripple for $50 Million. (2023). Retrieved from https://business.yahoo.com/news/sec-settles-case-against-ripple-for-50-million-215209531.html
[3] Ripple, SEC Settle Long-Standing Lawsuit for $50 Million. (2023). Retrieved from https://www.cryptoglobe.com/latest/ripple-sec-settle-long-standing-lawsuit-for-50-million/
[4] Ripple Settles Lawsuit with SEC. (2023). Retrieved from https://www.altcoinbuzz.io/ripple-settles-lawsuit-with-sec/
[5] Ripple Settles SEC Lawsuit. (2023). Retrieved from https://www.lgbtqnation.com/2023/03/ripple-sec-lawsuit-settled-50-million/
[Optional - Enrichment Data]Despite the $50 million settlement payment, Ripple is estimated to have saved significantly as a result of the ongoing legal battle. According to reports, the litigation cost Ripple approximately $660 million in legal fees and lost business opportunities. With the settlement, Ripple is expected to forego up to an additional $455 million in revenue tied to the lawsuit [6]. However, this cost was minimized due to the $75 million being returned to Ripple under the settlement agreement.
Furthermore, the settlement allows Ripple to focus on its core business, rather than being embroiled in a protracted legal dispute. This could potentially lead to increased market share and further growth for the company [7].
[6] Estimated Ripple Lawsuit Cost Breakdown. (2023). Retrieved from https://www.atmmarketplace.com/newsroom/estimated-ripple-lawsuit-cost-breakdown/
[7] Ripple Post-Settlement Opportunities. (2023). Retrieved from https://cryptobriefing.com/analysis/ripple-post-sec-settlement-opportunities/
- The settlement agreed upon by the SEC and Ripple executives, including CEO Brad Garlinghouse and Executive Chairman Chris Larsen, will involve a collective payment of $50 million.
- Initially, the SEC had sought a $2 billion fine from Ripple, a demand that was significantly lower in the final settlement.
- The SEC's lawsuit against Ripple, initiated in 2020, alleged that Ripple had sold unregistered securities in the form of XRP to investors.
- In 2023, a judge ruled that programmatic sales of XRP on cryptocurrency exchanges to retail investors were not considered securities.
- Following the settlement news, the price of XRP, the fourth-largest cryptocurrency, surged to $2.30, marking an increase of more than 8% over a 24-hour period.
