Main Points:
- Ripple Labs and the U.S. Securities and Exchange Commission (SEC) jointly filed a motion on April 10, 2025, to hold their cross-appeal proceedings in abeyance before the Second Circuit Court of Appeals.
- The joint motion follows an “agreement-in-principle” to settle the protracted dispute over whether XRP constitutes a security.
- On April 16, 2025, Circuit Judge José Cabranes granted a 60-day stay, directing the SEC to submit a status report by June 15, 2025.
- The original district court ruling (August 2024) found Ripple liable for $125 million, but subsequently reduced to a $50 million penalty after partial victory for Ripple on public sales.
- Final settlement hinges on internal SEC approval under new Chair Paul Atkins, confirmed April 9, 2025, known for a more crypto-friendly stance.
- A successful settlement would end both appeals and cross-appeals, potentially dismissing the case in full and setting a landmark precedent for digital-asset regulation.
Background of the SEC’s XRP Lawsuit
In December 2020, the SEC filed suit against Ripple Labs and two of its executives, alleging that the sale of XRP tokens constituted an unregistered securities offering. The lawsuit marked one of the most consequential regulatory actions against a major cryptocurrency firm and raised fundamental questions about how digital assets should be classified under U.S. securities law.
The case’s initial phase culminated in a mixed ruling from U.S. District Judge Analisa Torres in August 2024. Judge Torres determined that institutional and direct XRP sales to sophisticated investors breached securities laws, while public market XRP sales did not qualify as securities transactions. As a result, Ripple was ordered to pay a $125 million fine, later negotiated down to $50 million in light of the bifurcated decision.
Both the SEC and Ripple immediately signaled their intent to challenge aspects of the decision. The SEC appealed parts of the ruling it considered too favorable to Ripple, and Ripple cross-appealed the adverse findings regarding institutional sales .
The “Agreement-in-Principle” and Joint Motion
On April 10, 2025, attorneys for both parties submitted a joint motion to the U.S. Court of Appeals for the Second Circuit, requesting the appeal be held in abeyance. The filing noted that Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen had reached an agreement-in-principle with the SEC, subject to formal approval by SEC commissioners.
“The parties have reached an agreement-in-principle to resolve the underlying action, the Commission’s appeal, and Ripple’s cross-appeal, conditioned upon Commission approval. The parties request additional time to obtain that approval and, if obtained, to seek any indicative rulings from the district court,” the joint motion stated.
By pausing the appellate process, both Ripple and the SEC aim to conserve judicial resources and avoid duplicative filings while finalizing settlement terms. This move reflects a strategic pivot, prioritizing negotiated resolution over prolonged litigation.
Court Approval of the 60-Day Stay
On April 16, 2025, the Second Circuit issued an order granting the joint motion. Circuit Judge José Cabranes signed off on the 60-day abeyance and directed the SEC to file a status report within that period—specifically by June 15, 2025.
This stay effectively freezes all deadlines in the appeal and cross-appeal, providing a clear window for both parties to secure the necessary internal approvals and finalize the settlement agreement. Industry observers note that it is customary for the SEC to require formal commission votes to drop or modify enforcement actions, even when staff-level agreement exists.
Significance of New SEC Leadership
A critical factor underpinning the settlement push is the recent confirmation of Paul Atkins as SEC Chair on April 9, 2025. Atkins, known for his more accommodative views toward digital-asset innovation, represents a sharp contrast to his predecessor, Gary Gensler, whose tenure was marked by aggressive crypto enforcement.
Under Atkins’s leadership, the SEC has already signaled willingness to reassess major enforcement cases. Observers have cited his confirmation as a catalyst for the joint Ripple motion and believe his vote may be pivotal in approving the settlement.
Potential Settlement Terms
While the exact details remain confidential pending formal approval, public statements and filings suggest key elements:
- Mutual Dismissal of Appeals: Upon SEC approval, both the SEC’s appeal and Ripple’s cross-appeal would be withdrawn, ending appellate litigation.
- Final Judgment Adjustment: The original district court judgment may be amended to reflect the agreed penalty—likely the $50 million figure.
- Clarifying Guidance: SEC staff and Ripple may issue joint statements or commentary clarifying the status of XRP sales in public versus institutional contexts, potentially informing broader digital-asset regulation.
If finalized, the settlement could close a four-year chapter of legal uncertainty for Ripple and XRP holders, while providing a clear regulatory benchmark for other token issuers.
Market and Industry Reactions
The 60-day pause and settlement momentum have already impacted XRP market dynamics. Trading volumes and price movements have shown moderate bullish tilt as investors anticipate resolution. According to TradingView data, XRP traded in a narrow channel immediately following the stay order, indicating cautious optimism among traders.
Industry lawyers and analysts have speculated that the settlement may include provisions addressing Ripple’s on-going product development and licensing initiatives. Some suggest that the SEC may require enhanced transparency around token distributions or secondary market reporting, aligning with evolving global best practices.
Broader Implications for Crypto Regulation
The Ripple-SEC saga has been closely watched as a bellwether for U.S. digital-asset policy. A negotiated settlement, endorsed by the SEC Commission, could signal a shift toward more collaborative rule-making with industry participants rather than adversarial enforcement.
Moreover, the outcome may inform other high-profile cases, such as enforcement actions against token issuers and trading platforms. A clear resolution on XRP could embolden innovation in decentralized finance (DeFi) and tokenized asset markets by reducing legal ambiguity.
Next Steps and Timeline
- By June 15, 2025: SEC files status report confirming whether Commission approval has been obtained.
- Post-Approval: Parties will move to dismiss both appeals. A joint motion may be filed in district court to enter or amend final judgment.
- Settlement Announcement: Contingent on SEC vote; could occur as early as mid-summer 2025.
Should internal approval falter, the case will resume under existing appellate deadlines, potentially extending litigation into late 2025 or beyond. However, both Ripple leadership and SEC officials have publicly expressed confidence in concluding the matter amicably.
Conclusion
Ripple Labs and the SEC’s joint motion to pause appeal proceedings represents a watershed moment in crypto-regulatory history. By agreeing to an “agreement-in-principle” and securing a 60-day abeyance, both sides underscore a mutual interest in concluding a four-year legal battle over XRP. With new SEC Chair Paul Atkins at the helm and internal commission approval pending, the stage is set for a landmark settlement that could clarify the regulatory status of digital assets in the United States. The industry now watches closely as the SEC prepares its status update by June 15, 2025—potentially heralding the end of one of crypto’s most consequential enforcement actions.
