Ripple to Pay $50 Million to SEC Under Proposed $125 Million Settlement

Ripple settles with SEC, agrees to pay $50 million penalty. SEC and Ripple drop appeals, signaling end to legal fight. Ripple Labs has agreed to pay $50 million to the U.S. Securities and Exchange Commission (SEC) as part of a proposed settlement. This agreement comes nearly four years after the SEC first filed a lawsuit against the company. Both Ripple and the SEC filed jointly a motion with the U.S. District Court for the Southern District of New York on Thursday, May 9th, asking the Court to approve the deal. Ripple, SEC Drop Appeals in $125M XRP Case Settlement The case was filed in December 2020 when the SEC accused Ripple of violating federal securities laws. The agency had alleged that Ripple was selling its XRP digital token to institutional but registering it not as a security. At first, the SEC required a fine of $2 billion. The court later ordered Ripple to make only a $125 million payment, which was a significantly smaller amount. Now, under the proposed settlement, Ripple will have to pay $50 million to the SEC. The amount of the remaining $75 million, which was in escrow, will be paid to Ripple. Both parties have agreed to withdraw their respective appeals, presenting a mutual decision to go ahead. Judge Analisa Torres, who was presiding over the case, had previously ruled that Ripple’s sales on public exchanges of XRP did not break the securities laws. This was considered a partial victory for Ripple. On the other hand, the court ruled the company still liable for selling XRP to institutional investors directly. This is how a $125 million fine came about. Ripple and the SEC in the settlement filing also called on the court to terminate the injunction on their operations. If the court approves the request, the lawsuit will be sealed, and the Ripple will repossess the funds that are being kept in escrow. Ripple Eyes Growth as Legal Cloud Begins to Clear Interestingly, this settlement is a time of change at the SEC. In April, Paul Atkins, a crypto-friendly candidate appointed by President Donald Trump, went on to become the SEC Chair. Since that time, the agency has toned down its aggressive investigation of the crypto industry. Chair Atkins has been vocal in supporting clearer rules, which permit innovation on digital finance. He emphasized this shift during a roundtable hosted by the SEC’s Crypto Task Force in April. In its statement, the SEC specified that the settlement does not represent a judgment on the merits of the case. Rather, it reflects the agency’s newly developed tendency towards regulating the digital assets. This move indicates a change towards an overall routine as far as the manner in which U.S. regulators intend to regulate cryptocurrencies in future is concerned. Speaking about Ripple, the company looks eager to leave legal troubles behind. With the hinge point of legality turning, Ripple now has the potential to develop its business and the services that relate to crypto. The price of XRP has also reacted to the news by increasing 7%, trading around $2.37, and even touching $2.42 briefly on Friday. If the court approves this settlement, this case may become a precedent for how future cases of a similar nature can be handled. It could also encourage other crypto companies with legal challenges to seek negotiated conclusions instead of protracted battles in courts. Overall, the proposed deal between Ripple and the SEC could put an end to a long-winded legal chapter. Above all, it may signal a new era of relationships between U.S. regulators and the cryptocurrency world. Source: https://www.livebitcoinnews.com/ripple-to-pay-50-million-to-sec-under-proposed-125-million-settlement/