The protracted legal battle between blockchain firm Ripple and the U.S. Securities and Exchange Commission (SEC) has reached a conclusion. The regulatory body solidified on Thursday that a settlement has been reached, with Ripple agreeing to pay a $50 million fine.
The settlement news had an immediate impact on XRP, Ripple’s cryptocurrency. Over the past 24 hours, the coin has seen a surge of approximately 6%, leading to a weekly return of nearly 4%.
The agreed settlement is significantly less than the initial $125 million penalty imposed on Ripple last year by Judge Analisa Torres of the Southern District of New York (SDNY). The SEC originally called for a $2 billion penalty, alleging that Ripple had accumulated over $1.3 billion through the sale of unregistered XRP tokens, thereby violating federal securities laws.
However, Judge Torres found that while Ripple’s direct sale of XRP to institutional clients was in violation of the federal securities laws, the sales of XRP to retail clients via exchanges were not. Both Ripple and the SEC appealed the order, with Ripple seeking dismissal of the penalty and the SEC pushing for a higher amount.
As part of the settlement, the SEC has also agreed to return over $75 million currently held in escrow to Ripple. SEC Commissioner Caroline Crenshaw criticized the settlement in the official announcement, stating, “This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws.”
The settlement comes a few weeks after the appointment of Paul Atkins as the SEC Chair, who is known for his crypto-friendly stance. Ripple’s CEO, Brad Garlinghouse, had already confirmed the end of the SEC battle in mid-March, hinting that the settlement was finalized when Mark Uyeda was acting head of the regulatory agency. Uyeda has been known to drop several other high-profile crypto lawsuits and investigations.
