Ripple to Withdraw Cross-Appeal Against SEC, Concluding Extended Legal Dispute with the Agency
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The years-long legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) seems to have reached a resolution, as Ripple Labs CEO Brad Garlinghouse announced Friday that the company will drop its cross-appeal in the case. “Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously stated,” Garlinghouse wrote on X. “We’re closing this chapter once and for all, and focusing on what’s most important – building the Internet of Value. Lock in.” XRP rose modestly by 1.4% following the announcement.
This decision comes just a day after U.S. District Judge Analisa Torres of the Southern District of New York (SDNY) rejected a joint request from the SEC and Ripple to approve a proposed settlement agreement that would have reduced Ripple’s civil penalty to $50 million and lifted the permanent injunction against the firm. This latter point appeared to be a significant issue for Torres, who commented: “Indeed, if the Court should not be concerned about Ripple violating the law, why do the parties want to eliminate the injunction that tells Ripple, ‘Follow the law’?” Torres noted, “When the Court imposed the injunction, it did so because it found a 'reasonable probability' that Ripple would continue violating federal securities laws. This has not changed, nor do the parties claim that it has.”
This joint request was the second one rejected by Torres, who turned down an earlier attempt in May due to jurisdictional and procedural issues. With the court showing no signs of compromise on the settlement terms, Ripple’s choice to withdraw its cross-appeal effectively concludes the case by accepting the originally imposed civil penalty of $125 million and likely maintaining the permanent injunction against the firm. A spokesperson for Ripple Labs did not immediately provide a comment.
The SEC first initiated legal action against Ripple in 2020 under then-Chair Jay Clayton, alleging that the company violated federal securities laws through its sales of XRP. After extensive litigation, Torres ruled in 2023 that sales of XRP to retail traders on public exchanges did not qualify as securities transactions, while sales to institutional investors did, thereby violating securities laws.Feel free to let me know if you need any more adjustments!
