Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have jointly requested a federal court to dissolve the long-standing injunction that barred Ripple from certain XRP sales and to release over $125 million currently held in escrow.
This move marks a significant development in the high-profile legal battle that has shaped the U.S. crypto regulatory landscape since 2020.
🚨NEW: The @SECGov and @Ripple have jointly requested a Manhattan District court to dissolve the injunction in their ongoing case and release the $125 million civil penalty held in escrow.
They’re proposing that $50 million be paid to the SEC, with the remaining funds returned… pic.twitter.com/UopQuQNG5q
— Eleanor Terrett (@EleanorTerrett) June 12, 2025
The SEC first sued Ripple Labs in December 2020, alleging that the company and its executives conducted unregistered securities offerings through institutional sales of XRP. The court later ruled that while Ripple’s institutional sales of XRP did violate securities laws, programmatic sales to retail investors via exchanges did not. As a result, Ripple was ordered to pay a civil penalty exceeding $125 million and was permanently enjoined from future violations of Section 5 of the Securities Act of 1933.
The SEC announced a settlement with Ripple. Under the agreement, Ripple would recover more than $75 million held in escrow, and the court’s injunction would be vacated. The settlement also stipulates that neither party will seek to amend the court’s summary judgment despite both sides having appealed aspects of the ruling.
The settlement has sparked debate within the regulatory community. SEC Commissioner Caroline Crenshaw criticized the agreement, arguing that it undermines both the court’s authority and the SEC’s enforcement program. She expressed concern that vacating the injunction could create a regulatory vacuum, especially as the SEC considers new rules for crypto assets.
Legal analysts note that this outcome is viewed as a partial victory for Ripple, particularly in comparison to the SEC’s initial demand for a $2 billion penalty. However, the case’s mixed findings—treating XRP as a security in some contexts but not others—leave lingering questions about how U.S. law will treat digital assets in the future.
The court is expected to review the joint request in the coming weeks. If approved, Ripple will regain access to the escrowed funds, and the legal restrictions on its XRP sales will be lifted, potentially setting a precedent for future enforcement actions involving cryptocurrencies.
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