Ripple, SEC Ask US Court To Release $125 Million In Escrow As They Seek To Settle Years-Long Case

The courtroom brawl between Ripple and the U.S. Securities and Exchange Commission (SEC) has taken a key step. The two parties have asked that the Manhattan District Court dissolve a prior injunction and free a $125 million civil penalty currently held in escrow. The move signals that the long-running spat might be finally coming to an end.

The Proposed $125 Million Settlement

In a court document filed on Thursday in the U.S. District Court for the Southern District of New York, attorneys representing Ripple and the SEC requested the judge grant their joint motion and issue a ruling to “dissolve the injunction against Ripple” and pay the regulator a $50 million civil penalty. The remaining funds would be returned to the company.

“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,” they said in the filing.

The June 12 filing marks the latest move in the high-profile legal saga between Ripple and the Securities and Exchange Commission that has stretched nearly five years. In late 2020, the SEC accused Ripple of raising $1.3 billion by selling XRP as unregistered securities.

In 2023, the blockchain payments firm notched a partial legal victory when Judge Torres ruled that programmatic sales of XRP to retail buyers via exchanges did not constitute securities offerings. She did, however, determine that Ripple’s institutional sales violated securities laws.

The SEC demanded a mammoth $2 billion fine after the ruling, though it was later reduced to $125 million. Both parties are looking to have $50 million go to the SEC, with the remaining $75 million going to Ripple.

Why The Fate Of The Latest Motion Is ‘Very Important’

Prominent attorney and crypto personality Bill Morgan has observed that the latest motion filed by the two parties is “very important.”  

“If the motion is not allowed and the settlement agreement is not varied or a new settlement agreement entered, then there is no settlement and the appeal and cross-appeal would continue,” Morgan postulated in a June 13 post on the X social media platform. 

As ZyCrypto reported, Judge Torres previously rejected an earlier joint motion for an indicative ruling on the settlement, citing procedural flaws due to the pending appeals before the Second Circuit, while also citing that the parties failed to justify the necessity for reworking the final judgment. 

In the most recent joint motion, the parties cite “exceptional circumstances” such as the SEC’s pivot away from its previously aggressive crypto enforcement under former chair Gary Gensler.

After U.S. President Donald Trump assumed office in January and appointed crypto-friendly Paul Atkins to serve as the SEC’s new chairman, the Commission has done an about-face on crypto regulation.