SEC Reaches Settlement with Ripple Labs Amid Controversy
By Olivia Rubin
May 9, 2025, 5:50 PM
In a significant development in the cryptocurrency sector, the U.S. Securities and Exchange Commission (SEC) has reached a settlement with Ripple Labs, a crypto firm that has been under scrutiny for years. Ripple has connections to high-profile political figures, and the settlement has sparked criticism from within the SEC itself.
Details of the Settlement
The SEC’s agreement with Ripple Labs would resolve a lengthy legal battle that began in December 2020. The settlement allows Ripple to recover a substantial portion of the $125 million fine originally imposed due to allegations of violating securities laws through the sale of XRP tokens, raising $1.4 billion. According to the settlement, Ripple will pay $50 million to the SEC while reclaiming approximately $75 million currently held in escrow. Additionally, the deal seeks to dissolve an injunction that prevents the company from future violations related to the case.
The settlement still requires court approval, after which it is expected that follow-up actions will aim to dismiss pending appeals, including one from Ripple regarding the initial fine.
Internal SEC Dissent
Despite the settlement, not all SEC members are in agreement. Commissioner Caroline Crenshaw, who was appointed during Donald Trump’s presidency, termed the settlement a "tremendous disservice" to the public and expressed her concerns regarding its implications for the SEC’s enforcement actions related to cryptocurrency.
In her statement, Crenshaw criticized the SEC’s decision, suggesting that it undermines investor protections and reflects a shift in the agency’s approach to crypto regulation. She noted that this settlement is part of a broader trend that she believes could erode the SEC’s enforcement program in the cryptocurrency landscape.
Crenshaw, a Democrat, had her term expire in 2024 but has since been renominated by President Joe Biden. She continues to serve as a commissioner until the Senate confirms her nomination or her 18-month extended term concludes.
Ripple’s Position
Ripple’s CEO, Brad Garlinghouse, previously hailed the settlement as a victory for the company, suggesting that it signifies what he termed an "overdue surrender" by the SEC. Ripple’s historical ties to the Trump administration are notable; the company reportedly donated $5 million to Trump’s inaugural committee, and Garlinghouse has been seen in meetings with Trump and participated in the president’s recent "crypto summit."
The conflict began when the SEC sued Ripple and its executives for allegedly violating securities laws with the sale of its XRP tokens. A pivotal legal ruling in 2023 found that XRP tokens sold to the public did not constitute securities, although the court still imposed the $125 million fine, citing improper sales to institutional investors. Following the ruling, the SEC initially appealed but later withdrew its appeal in March 2025. Looking Ahead
As the court now assesses the proposed settlement, members of the cryptocurrency community and regulatory bodies alike will be closely watching the outcome, which may set a precedent for future cases and regulatory treatments in the crypto sphere. The settlement, if approved, could reshape the regulatory environment surrounding cryptocurrencies and significantly impact investor protections.
This development underscores the ongoing complexities and tensions within regulatory frameworks as they adapt to evolving technologies and market practices in the rapidly changing landscape of digital currencies.
Share this article:
