The US Securities and Exchange Commission (SEC) and Ripple Labs have made a significant step towards resolving their long-standing legal battle. In a joint motion filed with the United States Court of Appeals for the Second Circuit, the two parties have requested to put their appeals on hold while they finalize a settlement agreement. This agreement, once formalized and approved by the SEC, would not only resolve the SEC’s appeal but also Ripple’s cross-appeal and claims against Ripple executives Brad Garlinghouse and Chris Larsen.
The motion, submitted on April 10, aims to pause the appeals process and eliminate the need for both parties to submit briefs by the previously set deadline of April 16. This move comes after the SEC filed its notice of appeal in October 2024, challenging a district court’s final judgment, with Ripple following up with a cross-appeal a week later.
As part of the proposed settlement, Ripple has agreed to pay a $50 million civil penalty and withdraw its cross-appeal. However, the settlement is still subject to internal review and formal approval by the SEC. If approved, the parties may seek an indicative ruling from the US District Court for the Southern District of New York, where the case originated.
The motion emphasizes the importance of pausing the appeals process to conserve judicial and party resources while negotiations are finalized. It has been noted that all parties involved in the appeal and cross-appeal have consented to the delay, and no party would be prejudiced by it.
The legal battle between the SEC and Ripple dates back to a December 2020 enforcement action where the SEC alleged that Ripple’s sales of XRP constituted unregistered securities offerings. A federal judge ruled in July 2023 that XRP sales to institutional investors violated securities laws, setting the stage for the appeals that are now on hold.
Ripple has faced ongoing regulatory scrutiny but has secured legal victories in the past months. The company has maintained that its operations comply with current securities laws and has called for clear legislative guidance to differentiate digital assets from traditional securities.
The recent filing indicates that both parties are making progress towards a final resolution of the multi-year dispute. If the court grants the motion to stay the appeals process, it would allow the parties additional time to finalize the settlement and potentially bring an end to the case.