In a significant turning point for Ripple Labs, the blockchain payments company has reached a settlement with the US Securities and Exchange Commission (SEC) after years of legal battles regarding the classification of its associated token, XRP.
SEC Settlement Provides Clarity For Ripple
According to the agency’s announcement on Thursday afternoon, the settlement involves Ripple Labs, CEO Brad Garlinghouse, and Executive Chairman Christian A. Larsen.
The SEC’s filing outlines a framework for resolving its civil enforcement action against the defendants, providing clarity and potential relief for Ripple as it seeks to move forward.
The details of the settlement highlight that the regulatory agency and Ripple Labs will jointly request the district court to issue an indicative ruling on whether it will dissolve the injunction that has been imposed on the blockchain payment firm.
This injunction stems from a final judgment issued on August 7, 2024, which included a substantial civil penalty of $125 million . Under the terms of the agreement, Ripple will pay $50 million to the Commission, satisfying that portion of the penalty, while the remaining funds will be returned to Ripple.
Next Steps For Both Parties Outlined
According to the agency, the settlement is contingent upon the district court indicating that it would agree to dissolve the injunction and release the escrowed penalty amounts.
Once this indication is received, both parties will seek a limited remand to the district court for the necessary relief. Following this, they plan to move to dismiss their respective appeals currently pending in the US Court of Appeals for the Second Circuit.
The SEC’s decision to settle does not imply an assessment of the merits of the claims made against Ripple but is based on a judgment that resolving the enforcement action will aid the Commission in its efforts to reform and renew its regulatory approach to the cryptocurrency sector.
When writing, XRP trades at $2.30, registering a 7% surge in the 24-hour time frame.
Featured image from DALL-E, chart from TradingView.com
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