The US Securities and Exchange Commission (SEC) and Ripple have jointly submitted their latest filing, requesting the court to release a $125 million civil penalty held in escrow. The move is the latest effort in concluding their nearly five-year legal dispute.
Both parties have requested that the Manhattan District Court issue a ruling to “dissolve the injunction against Ripple.” They said the court to allow for $50 million fines to go to the SEC, with the rest $75 million released to Ripple.
Last month, a judge rejected a proposed settlement that would have reduced Ripple’s penalty from $125 million to $50 million. Judge Analisa Torres stressed that the SEC and Ripple must show “exceptional circumstances” to vacate a final judgment.
In the new request filed Thursday, Ripple and the SEC are trying to show that the circumstances now justify closing the case and lifting the restrictions.
End of the Legal Battle?
If Judge Torres approves this settlement, it would remove any remaining limits on Ripple’s ability to operate and return a significant amount of funds to the exchange.
Further, the judgment could formally end the legal battle between Ripple and the SEC. It would also mean that XRP has a legal ground in the US, potentially opening the door for broader institutional use and growth.
“Doing so would promote efficiency and the policy favoring settlements, obviate the need for additional litigation in this Court and the Court of Appeals, and be consistent with the SEC’s recent actions in other crypto registration cases,” the Thursday filing read.
Additionally, lawyers for Ripple and the SEC said that “there are ‘exceptional circumstances’ beyond the Settlement Agreement itself.” This justifies the modification of the final judgment to facilitate settlement, obviate the pending appeals, and conserve both parties’ resources.
The Five-Year Saga: Ripple Declared Victory in March
In 2020, the regulator accused Ripple of raising $1.3 billion via a sale, which it says an unregistered security.
Over a year ago, Judge Torres noted that some of Ripple’s sales did not violate securities laws. However, she ruled that other direct sales of the token to institutional investors were securities.
In March, Ripple CEO Brad Garlinghouse confirmed that the regulator has dropped its appeal, marking a decisive win for Ripple.
Notably, the SEC has retreated from aggressive enforcement actions against several crypto firms like Coinbase and Kraken recently. The reversals come under the acting SEC Chair Mark Uyeda, who is rolling back on these actions against crypto firms that were brought by former SEC chair Gary Gensler.
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