SEC Commissioner Caroline Crenshaw has voiced strong objections to the agency’s proposed settlement with Ripple Labs, highlighting concerns that it may weaken the SEC’s regulatory power over the cryptocurrency sector.
On May 8, 2025, the U.S. Securities and Exchange Commission (SEC) and Ripple Labs announced a settlement agreement, effectively ending a legal dispute that originated in December 2020.
@Ripple settles with the @SECGov, agreeing to pay a $50M penalty and dropping its cross-appeal, marking the near conclusion of a long-standing lawsuit.#SEC #Crypto #Ripplehttps://t.co/txqDDCnn0G
— Finance Newso.com (@Finance Newso) March 25, 2025
The settlement stipulates that Ripple will pay a $50 million penalty, significantly less than the $125 million fine initially imposed by Judge Analisa Torres in August 2024.
The $75 million that remains, currently set aside in escrow, is set to be returned to Ripple, pending judicial approval.
This agreement arrives in the wake of a court ruling that determined Ripple’s institutional sales of XRP were in violation of securities laws, while sales executed on public exchanges were permissible.
In a mutual concession, both the SEC and Ripple have agreed to abandon their respective appeals if the court lifts the injunction against Ripple, thus bringing one of the industry’s most scrutinized legal battles to a close.
Commissioner Crenshaw’s Critique Highlights Internal SEC Tensions
Commissioner Crenshaw has openly criticized the settlement, suggesting it jeopardizes investor protections as well as the agency’s authoritative stance.
In her remarks, Crenshaw asserted that the agreement “does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws.”
She cautioned that this settlement could potentially create a “regulatory vacuum,” leaving investors exposed until a thorough regulatory framework is established.
Her dissent underscores existing divisions within the SEC regarding its evolving strategy in crypto enforcement.
The settlement further exemplifies a notable shift as the SEC appears to be stepping back from aggressive enforcement actions in the crypto realm, which is reflected in the agency’s recent decisions to withdraw lawsuits against other cryptocurrency companies like Coinbase and Kraken.
The SEC is rolling back a barrage of Gensler-era enforcement actions. What does that mean for crypto?#SEC #Regulation #Crypto https://t.co/D3VZuNrl29
— Finance Newso.com (@Finance Newso) March 10, 2025
The immediate market response to the settlement has been positive, with a notable surge in XRP’s price.
Current trading data shows XRP priced at approximately $2.38, reflecting market optimism in light of the legal resolution.
Source: Finance Newso
What’s Next for the Ripple Case?
Despite the agreement between the SEC and Ripple, the final resolution of this prominent lawsuit remains uncertain.
Next Steps: Judge Torres needs to provide an indicative ruling as to whether the Court would: (1) dissolve the injunction and release the escrow with $50 million going to the SEC and the balance back to Ripple; (2) if Judge Torres provides the indicative ruling, the SEC and…
— James K. Filan (@FilanLaw) May 8, 2025
Former federal prosecutor James Filan notes that the initial requirement is Judge Analisa Torres’s indicative ruling.
The judge must formally decide to dissolve the injunction imposed last August and to authorize the return of $75 million from escrow, which would set the stage for the next procedural steps.
If Judge Torres indicates her approval, both the SEC and Ripple intend to petition the Second Circuit Court of Appeals for a limited remand, returning the matter to her courtroom to finalize the agreed settlement order.
This process would initiate the official motion to lift the injunction and redistribute the funds.
Once the injunction is rescinded and the settlement funds are allocated, the final step would be for both parties to jointly request the Court of Appeals to dismiss the SEC’s appeal along with Ripple’s cross-appeal.
This would mark the conclusion of over four years of litigation that began with the SEC’s December 2020 lawsuit concerning unregistered securities offerings of XRP.
