Ripple and SEC Move Toward Unexpected Closure of Four-Year Legal Feud
In a dramatic turn in one of crypto’s most closely watched court battles, Ripple Labs and the U.S. Securities and Exchange Commission have jointly filed a motion to settle their long-running lawsuit. The motion proposes the release of $125 million in escrowed funds, which would end the nearly five-year dispute that has shaped digital asset regulation in the U.S.
The suggested resolution would enable Ripple to settle a civil fine to the SEC at $50 million, in addition to recovering $75 million. The two parties claim the agreement will save them from the necessity of extra appeals and save judicial and non-judicial resources.
According to attorney John E. Deaton, who has been a vocal figure throughout the case, there is a 70 percent chance that Judge Analisa Torres will approve the motion. The joint request was submitted to the U.S. District Court for the Southern District of New York, signalling a rare moment of consensus in a case that has seen years of fierce legal exchanges.
Legal Experts Weigh In as SEC Faces Growing Scrutiny
John Deaton responded to the news of the settlement with reference to a broader trend in the SEC overreaching the mark. According to him, the leadership of the agency had not recognized enforcement strategies employed in the past that were deemed to be too extreme by many in the crypto world.
In making his argument, he cited the prior remarks of Judge Sarah Netburn, who accused SEC lawyers of demonstrating no “faithful service to the law.” The recent successful case against the Debt Box, in which the SEC has been blamed as having instigated misconduct by its attorneys, is another relevant point made in the context of Deaton, who undermines the credibility of the agency.
Conversely, a veteran SEC official, Marc Fagel, challenged the legal vigour of the SEC filing. This is because he condemned the use of political timing and policy change as a justification by the agency as their arguments might not pass as a good legal decision.
Settlement Could Redefine the Regulatory Landscape for Crypto
As has been its claims, Ripple has always maintained that XRP is not a security. The case has served as one of the significant parameters according to which digital assets are treated in U.S. law. An eventual green light on the settlement would create a precedent in cryptocurrency-related enforcement.
According to an expert in law like Bill Morgan, the joint resolution is most likely to be endorsed by Judge Torres. However, some experts point out that legal arguments put forward in the filing are primarily procedural and provide no regulatory context or foresight advice.
In the event it gets passed, the motion would formally put the case to rest, and it would end years of inconclusiveness for the Ripple and XRP users. The new deal is an unusual example of collaboration between the SEC and a crypto company, which may become a pattern for a more organized system of regulation in the future.
