Ripple Labs Triumphs: Resolving the SEC Dispute
In a landmark victory for Ripple Labs and its digital asset XRP, the company has successfully settled its contentious legal dispute with the United States Securities and Exchange Commission (SEC), drawing a close to a drawn-out battle that has been closely watched by the entire cryptocurrency industry.
A Resolution to a Long-Standing Dispute
According to journalist Eleanor Terret, Ripple has opted to withdraw its appeal against the SEC, agreeing to a significantly reduced penalty of $50 million, a sharp decrease from the initially demanded $125 million. Meanwhile, the SEC plans to request the removal of the ‘obey the law’ injunction previously placed on Ripple by Judge Torres.
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This settlement concludes a legal saga that commenced in 2020 when the SEC accused Ripple of conducting an unauthorized securities offering through the sale of XRP tokens. Terret’s insights reveal that once this agreement gains final approval and is ratified by the Commission, Ripple will have the opportunity to move forward, leaving the lengthy legal battle behind.
Despite the substantial legal costs, estimated to be between $150 million and $200 million, Ripple emerges with an opportunity to regain its footing. The SEC’s pursuit of the case has also likely involved significant taxpayer-funded expenses.
Ripple’s Legal Win: Implications for XRP
The legal proceedings had profound implications for XRP holders, as multiple exchanges, including Binance, eToro, and Coinbase, chose to delist the token, resulting in a marked decrease in its market value. This uncertainty deterred other cryptocurrency ventures from establishing operations within the United States, fearing possible legal challenges from the SEC, headed by Gary Gensler at the time.
Critics, as noted by Terret, have highlighted that SEC Chair Gary Gensler’s focus on targeting crypto firms for non-registration has undermined public trust. The agency has faced criticism for neglecting substantial threats within the crypto space, such as the collapses of FTX and Celsius, which inflicted significant financial losses on investors.
For Ripple, there is a positive aspect to this settlement. The company will pay a smaller fine than initially expected, potentially avoiding the ongoing injunction that could have disrupted its operations. Additionally, Ripple’s settlement has contributed to greater legal clarity regarding programmatic and secondary market sales of XRP—a decision that remains unchallenged.
Forward-Looking Statements from Ripple’s Leadership
Stuart Alderoty, Ripple’s Chief Legal Officer, expressed optimism in a social media post, suggesting that this would likely be his last update on the SEC case. Alderoty noted that the SEC has agreed to drop its appeal unconditionally, and Ripple will also withdraw its cross-appeal. The SEC will retain $50 million of the fine, held in an interest-bearing escrow account, while the remaining amount will be returned to Ripple.
As of the latest data, XRP is trading at $2.45, reflecting a 9% increase over the past week and inching closer to its all-time high of $3.40, achieved during the 2018 bull run.
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