A senior U.S. Securities and Exchange Commission (SEC) official has criticized a proposed settlement between the agency and Ripple Labs, potentially marking the final chapter of a years-long legal dispute over the XRP token.
On May 8, the SEC and Ripple jointly filed a settlement request in a New York court, seeking to dissolve a $125 million civil penalty imposed on Ripple in August 2024. Under the proposal, $75 million—currently held in escrow—would be returned to Ripple, signalling a move toward resolution in the high-profile case.
However, SEC Commissioner Caroline Crenshaw voiced strong opposition to the proposed agreement, warning that it threatens the integrity of the agency’s crypto enforcement efforts and undermines legal precedents.
“This settlement, alongside the systematic dismantling of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public,”
Crenshaw criticized the agency’s strategic shift since the Trump administration, highlighting a pattern of dismissed enforcement actions that she believes erode investor protections and create regulatory gaps.
“The settlement is not in the best interests of the investors and markets that our agency is tasked with serving and protecting. It creates more questions than answers,”
she added.
The legal case against Ripple dates back to December 2020, when the SEC accused the blockchain firm of unlawfully selling XRP as an unregistered security. In August 2024, Judge Analisa Torres ruled that XRP qualified as a security when sold to institutional investors and ordered Ripple to pay $125 million in penalties.
Though both parties appear aligned on settling, the deal still requires court approval. Legal expert and former federal prosecutor James Filan explained that Judge Torres must first issue an indicative ruling on the proposal. If she agrees, the Second Circuit Court of Appeals would remand the matter to her court, where a final settlement motion could be submitted.
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