The Securities and Exchange Commission came to an agreement with a cryptocurrency company connected to the White House to settle a lengthy legal dispute. This resolution has faced criticism from a present SEC commissioner nominated by President Donald Trump, stating that it “weakens the SEC” and one she cannot endorse as a proper settlement.
As outlined in the court documents, the settlement would permit Ripple Labs to recoup the majority of a $125 million penalty that was earlier levied against them; however, they will still be required to pay a substantial amount.
The deal stipulates that Ripple must pay $50 million to the SEC. However, the remaining $75 million out of the total $125 million—currently kept in an escrow account—would be returned to the firm, effectively conserving this amount for the company. Additionally, the arrangement would overturn the prohibition against the corporation from engaging in future infractions.
The settlement requests the court to approve the combined petition aimed at lifting the injunction against Ripple and returning the assets as per the accord. Following the court’s endorsement of this arrangement, all involved parties will proceed to appellate courts with the intention of dismissing their respective challenges, such as Ripple’s challenge against the imposed penalty.
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In a statement, SEC Commissioner Caroline Crenshaw remarked, “I cannot endorse this settlement,” and encouraged the court to decline it.
Crenshaw, who belongs to the Democratic Party, was selected as commissioner by Trump during his initial term and received unanimous approval from the Senate in 2020. Her tenure concluded in 2024; however, she was reappointed by ex-President Joe Biden. Commissioners have the ability to continue serving for up to 18 months following the conclusion of their terms.
In her statement, Crenshaw mentioned that the settlement significantly undermines the public interest and aligns with what she describes as the “methodical dismantling of the SEC’s cryptocurrency enforcement initiative.”
“I am concerned that the appellate court might deliver a ruling aligning with the legal points made by the Commission, which could weaken our agency’s recent focus on overturning our cryptocurrency oversight initiatives and diminishing safeguards for investors,” she stated.
Ripple
donated $5 million
To Trump’s inauguration committee, sources had informed ABC News earlier, and its CEO, Brad Garlinghouse, shared an image following his meeting with Trump in January. Additionally, Garlinghouse was present at Trump’s “crypto summit” held at the White House earlier this year.
Garlinghouse had earlier referred to the settlement as “a triumph – and a long awaited capitulation by the SEC.”
The SEC’s lawsuit had persisted for more than four years. In December 2020—while President Donald Trump was still serving his term—the commission filed charges against Ripple along with two officials for allegedly breaching securities regulations by raising $1.4 billion via the issuance of XRP cryptocurrency tokens.
In 2023, a federal judge granted Ripple a significant legal win by determining that the traded tokens were not securities. However, the court imposed a fine of $125 million since these tokens ought to have been offered exclusively to institutional investors. Initially, the Securities and Exchange Commission (SEC) challenged this decision through an appeal but eventually withdrew it in March.