XRP Lawsuit Nears Conclusion as Ripple Proposes SEC Settlement

XRP is once again at the center of attention as Ripple moves to resolve its prolonged legal entanglement with the U.S. Securities and Exchange Commission (SEC). In a significant development, both Ripple and the SEC have filed a joint motion requesting the dissolution of an injunction and the approval of a proposed civil penalty settlement.

Filed on May 8, 2025, in the U.S. District Court for the Southern District of New York, the motion outlines a potential end to the SEC’s enforcement action against Ripple Labs and its top executives, CEO Brad Garlinghouse and Executive Chairman Chris Larsen.

The proposed agreement centers around a $125 million escrow that was initially set aside pending litigation outcomes. Under the terms of this settlement, Ripple has agreed to pay $50 million to the SEC, while the remaining $75 million held in escrow would be returned to the company. This financial resolution, however, does not suggest any admission of wrongdoing or set a binding precedent, the SEC clarified.

Ripple’s legal battle dates back to December 2020, when the SEC first alleged that the company’s sale of XRP constituted the offer and sale of unregistered securities. The case has since become one of the most closely watched in the digital asset industry, casting a long shadow over regulatory treatment of crypto projects in the United States.

The agreement also hinges on next steps in the judicial process. Judge Analisa Torres must first indicate whether she is willing to dissolve the injunction issued in August 2024. If she gives this signal, the SEC and Ripple will jointly approach the U.S. Court of Appeals for the Second Circuit to request a limited remand, allowing the case to return to district court for final resolution of the settlement terms.

Should this remand be granted, Ripple and the SEC would move to formally conclude the case, including withdrawal of all pending appeals and full execution of the proposed penalty payment. Notably, Ripple has already agreed to drop its cross-appeal as part of the broader settlement framework.

The SEC emphasized that its decision to settle is in line with current enforcement priorities and the evolving legal landscape around digital assets. The regulator made it clear that the agreement does not imply any conclusions regarding whether Ripple or its executives broke securities laws.

Attorney James Filan, a prominent legal analyst of the case, noted that this procedural path is consistent with finalizing a settlement in appellate circumstances. The courts, he said, must sequentially navigate the indicative ruling, remand, and motion stages before officially closing the books on this case.

The case has experienced several swings since its inception. In October 2024, the SEC appealed Judge Torres’ summary judgment that had partially favored Ripple, particularly regarding XRP’s classification in secondary market transactions. Ripple responded with a counter-appeal aimed at countering the Commission’s broader legal arguments. In April 2025, both parties agreed to pause their appeals and pursue a cooperative resolution, leading to the May filing now under review by the court.

If the court grants the indicative ruling and procedural steps proceed swiftly, this could signal the end of one of the crypto sector’s most formative lawsuits. With potential regulatory clarity emerging, XRP’s standing in the U.S. market could stabilize as Ripple moves to recalibrate its operations following years of intense legal scrutiny.

Related: Expert Advice: Sell XRP If You’re Confused

As of now, there is no defined timeline for Judge Torres’ determination, meaning the crypto and legal communities alike will remain in suspense until the next steps unfold.