Ripple vs. SEC Nears Endgame: Joint Appeal Pause Hints at XRP Deal

The SEC initiated legal action against Ripple in December 2020, alleging that the company conducted an unregistered securities offering by selling XRP tokens. Ripple contested the claim, asserting that XRP should be considered a currency, not a security, and thus falls outside the SEC's jurisdiction. The case has been pivotal in shaping the regulatory landscape for cryptocurrencies in the United States.

On April 10, 2025, Ripple and the SEC submitted a joint motion to the U.S. Court of Appeals for the Second Circuit, requesting to hold their appeals in abeyance. This pause is intended to allow both parties to finalize a settlement agreement. The motion states that "an abeyance would conserve judicial and party resources while the parties continue to pursue a negotiated resolution of this matter".

This development follows Ripple CEO Brad Garlinghouse's announcement on March 19 that the case had effectively concluded, suggesting that the SEC was prepared to settle once the newly nominated SEC Chair, Paul Atkins, assumed office. The joint motion effectively cancels Ripple's previously scheduled April 16 deadline to respond to the SEC's brief filed in January.

Legal observers suggest that the SEC's willingness to pause proceedings may indicate a readiness to drop the case after Atkins assumes office. The Senate confirmed Atkins as the new SEC Chair on April 9, but the exact date of his swearing-in remains uncertain. Former SEC Chair Gary Gensler was sworn in three days after his confirmation in 2021, suggesting Atkins could take office as soon as April 12.

While the exact terms of the potential settlement have not been disclosed, reports indicate that Ripple may agree to pay a reduced civil fine of around $50 million, significantly lower than the original $125 million proposed by the SEC. Additionally, the SEC may agree to dismiss the permanent injunction imposed on Ripple's future XRP sales.

The parties have requested that the court hold the appeals process in abeyance for 60 days, during which the SEC commissioners will consider whether to approve the agreement. If approved, Ripple and the SEC will seek an indicative ruling from the district court to finalize the settlement.

Following the joint motion, XRP's price experienced volatility, declining from $2.022 to $1.93 within 24 hours. However, it rebounded to $2 at press time, representing a 0.65% increase over the past 24 hours. Trading volume also dropped significantly by 51% to $4.07 billion.

The potential settlement could have far-reaching implications for the cryptocurrency industry, providing clarity on the regulatory status of digital assets in the U.S. As the SEC under Chair Atkins may adopt a more crypto-friendly approach, the resolution of this case could set a precedent for future regulatory actions.

Both parties are expected to provide a status update to the court within 60 days, by June 9, 2025, detailing the progress of the settlement approval process. Until then, the appeals process remains on hold, and the crypto community awaits the final outcome of this landmark case.