The legal war between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has at long last had a conclusion. This case started in December 2020 when the SEC charged that Ripple sold XRP tokens without licensure. The SEC said Ripple had raised over $1.3 billion by selling XRP in what it referred to as an unregistered securities offering.
Both Ripple and the SEC have agreed to a settlement following years of court action. Ripple will pay $50 million, way less than the $2 billion the SEC was calling for.
Why Was Ripple Taken to Court?
The SEC felt that XRP should be classified as a security (just like a stock). That means it has to observe tight laws and rules. Ripple told reporters, XRP is a digital currency, not a security, and there was no law being broken by selling it.
In 2023, a judge partially sided with either one of the parties. According to the court, Ripple’s direct sales to big investors indeed violated the law. However, the court ruled out that selling on public exchanges to normal people was not illegal.
Following this, the two sides fought over how big the fine should be. The SEC, in its first move, had sought $2 billion in fines. Later, the court slashed that amount down to $125 million. Ripple wanted that to be thrown out even further. Now, finally, it has been agreed that $50 million is to be paid.
XRP Price Goes Up
Following the news of a settlement, the price of XRP soon skyrocketed up by around 6% in 24 hours. Investors were pleased as the case ended. The 7-day price gain reached almost 4%. Many people hope that following this case, the focus for XRP and Ripple can now shift towards expansion once more.
What Happens Next?
Even after the case was over, there are certain things that are still not clear. The new SEC leadership under Chairman Paul Atkins may get softer in the approach to crypto. His predecessor, Gary Gensler, was notorious for having a hard hand on digital assets.
Lawyers say Ripple will now attempt to resume normal business. They will also receive approximately $75 million that was frozen during the case. The company can now reconstruct its relationships and proceed with less legal restraint.
What This Means for Crypto
This case is extremely important for the overall crypto industry. A lot of companies have been watching what happens with Ripple. Some even believe this win proves that not all crypto sales are securities. Others feel the case demonstrates how unclear U.S. crypto laws remain.
The end outcome is a combination. Ripple lost some part of the case, but the penalty was not substantial. SEC saw a settlement, but much less than it had hoped for. Now, neither side is held down any longer. For the broader crypto market, this could bring more confidence. Developers, investors, and exchanges may feel safer moving forward. Still, full clarity will only come with better laws and regulations.
