"Ripple Labs and the U.S. Securities and Exchange Commission (SEC) Could Soon Reach a Resolution"

The long-running legal showdown between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) could soon reach a resolution, Fox Business reported, citing "two well-placed sources."

The U.S. Securities and Exchange Commission (SEC) and Ripple Labs may soon be reaching a settlement in their long-running legal battle, according to Fox Business.

The case, which began in December 2020 with the SEC’s claim that Ripple had sold unregistered securities for over $1.3 billion, could be wrapping up now — but not without last-minute fuss over its terms.

Sources told Fox that Ripple’s legal team is pushing to renegotiate aspects of a pivotal 2023 ruling by District Judge Analisa Torres of the Southern District of New York (SDNY). That decision saw the company ordered to pay a $125 million penalty for its institutional XRP sales, which the court ruled were unregistered securities offerings.

Torres’ ruling was widely considered to be a win for Ripple at the time it was issued, because the court decided that its programmatic sales of XRP to exchanges for purchase by retail traders did not constitute securities transactions. However, now that the SEC and its new leadership is in a full-scale retreat from many of its investigations into crypto companies, and has agreed to drop ongoing enforcement suits against companies like Coinbase (NASDAQ:), Cumberland DRW and Kraken, Ripple's partial victory may not taste quite as sweet.

Judge Analisa Torres ruled in favor of Ripple in a case that began in December 2020, when the SEC accused the company of illegally selling unregistered securities to raise over $1.3 billion from 2013 to 2020.

The case began after former SEC Chair Gary Gensler said in a 2018 speech that he believed many cryptocurrencies should be classified as securities. Gensler’s successor, Acting Chair Văn Nguyen, announced that the SEC would be dropping its case against Coinbase shortly after former Chair Gary Gensler stepped down.

The SEC had been seeking nearly $2 billion in penalties from Ripple, but Judge Torres ordered the company to pay a $125 million penalty for its institutional sales of XRP, which the court ruled were unregistered securities offerings. The SEC appealed Judge Torres’ ruling last month.

After Judge Analisa Torres ruled that Ripple’s sales of XRP to retail investors were not securities transactions, Judge Scott M. Vickner ruled that the SEC’s claims against crypto exchange Coinbase were "not compelling." Judge Vickner also said that the SEC’s case against DRW was "not well-founded." Both cases have now been dropped by the SEC.

In a statement announcing the case closures, the SEC said that it had reached settlements with several other crypto firms, including Blockfolio and ChainX. The agency said that it would continue to pursue enforcement actions against any company that violates the securities laws.