SEC and Ripple Reach Final Settlement: A New Chapter for XRP and the Crypto Industry

The U.S. Securities and Exchange Commission (SEC) has officially filed a settlement with Ripple Labs Inc., ending one of the most iconic lawsuits in the cryptocurrency industry that has lasted for more than four years. The move not only paves the way for XRP’s resurgence, but also signals a major shift in the SEC’s regulatory approach to the digital asset market.

A historic settlement after more than four years of legal wrangling

According to documents filed on May 8, 2025, in the U.S. District Court for the Southern District of New York, the settlement includes the distribution of $125 million that was escrowed under a previous judgment. Of that, $50 million will be transferred to the SEC and the remainder will be returned to Ripple, provided the Court approves the current restraining order and allows the funds to be released.

The lawsuit began in December 2020, when the SEC accused Ripple and two of its key executives — CEO Brad Garlinghouse and co-founder Chris Larsen — of violating federal securities laws by illegally issuing XRP tokens. The case has dragged on for years and has become emblematic of the conflict between technological innovation and regulation.

Court and next steps: All eyes on Judge Torres

According to attorney James K. Filan, who has been following the case since its early days, the next step is for Judge Analisa Torres to rule on whether to grant the current restraining order and allow the funds to be released. If granted, the SEC and Ripple will jointly petition the Second Circuit Court of Appeals to remand the case back to the District Court to formalize the settlement and end the ongoing appeals.

Filan stressed that only after a ruling of recommendation is issued can the SEC and Ripple file formal motions to finalize the settlement. The parties will then ask the Court of Appeals to dismiss their appeals, effectively closing the case.

A Strategic Shift at the SEC: A Shift Under New Leadership

The settlement reflects the SEC’s new strategic direction rather than an admission of legal victory or defeat. Since Chairman Paul Atkins took over from Gary Gensler in January, the SEC has taken a softer stance toward the crypto industry — postponing or withdrawing numerous enforcement actions, while holding public forums to develop rules more collaboratively.

In an accompanying announcement, the SEC asserted that “the settlement does not necessarily represent a legal position on future cases.” It’s a clear signal that the agency is looking for a new regulatory model — rather than continuing to fight individual cases, it’s focusing on building a clear and workable regulatory framework for the industry as a whole.

Impact on XRP and the Broader Market

Immediately following the settlement news, XRP prices saw a slight increase as investors saw the final regulatory hurdle being cleared. With the deal, Ripple can now expand its global operations without being subject to regulatory scrutiny in the United States — a key market in the global financial ecosystem.

For the entire crypto industry, this could be a watershed moment, as one of the world’s strictest regulators officially enters a more innovation-friendly regulatory era. While there are still many challenges ahead, the SEC-Ripple settlement is a breath of fresh hope for consensus and progress in digital asset regulation.