Ripple Labs has agreed to a $50 million settlement with the U.S. Securities and Exchange Commission (SEC), effectively concluding a legal dispute that began in December 2020. This settlement, significantly lower than the SEC’s initial $2 billion penalty request, also results in the release of $75 million in escrowed funds back to Ripple.
The SEC’s lawsuit alleged that Ripple raised over $1.3 billion through unregistered securities offerings by selling XRP tokens. While the court found that Ripple’s direct sales of XRP to institutional investors violated federal securities laws, it ruled that programmatic sales to retail investors via exchanges did not constitute such violations.
XRP’s market reacted positively to the settlement news, with the token’s price increasing by approximately 6% in the last 24 hours, bringing its 7-day return close to 4%.
This settlement marks a significant shift in the SEC’s approach to cryptocurrency regulation, coinciding with the recent appointment of Paul Atkins as SEC Chair, who is perceived as more crypto-friendly compared to his predecessor.
