Key Points:
- Appeals Withdrawn: Ripple and the SEC agree to drop their respective appeals, marking the end of a nearly five-year court fight.
- Judge’s Ruling Upheld: U.S. District Judge Analisa Torres rejected a joint settlement proposal, preserving a $125 million penalty and the injunction.
- $125 Million Penalty Accepted: Ripple will pay the full civil sanction after appeals are withdrawn.
- Market Reaction & ETF Prospects: XRP surged on the news, and probability of an XRP-spot ETF approval has risen to 88 %.
- Future Focus: Ripple shifts from litigation to building the “Internet of Value.”
Legal Resolution: Dropping the Appeals
On June 27, 2025, Ripple Labs CEO Brad Garlinghouse announced on X (formerly Twitter) that the company would withdraw its cross-appeal against the U.S. Securities and Exchange Commission (SEC) in their landmark lawsuit over XRP token sales. Simultaneously, Garlinghouse indicated that the SEC is expected to drop its appeal of the July 2023 ruling, which found that XRP sold on public exchanges does not constitute a security, even as $728 million in institutional sales were deemed a violation. With both parties stepping back, the protracted litigation that began in December 2020 is finally drawing to a close.
Judge Analisa Torres of the U.S. District Court for the Southern District of New York, whose rulings have guided this case, suggested that if both parties agree, they could simply withdraw their appellate filings rather than pursuing further litigation. Ripple’s decision follows her encouragement to either appeal or withdraw, allowing the original judgment to stand unchallenged.
Judge’s Rejection of Settlement Motion
Prior to the appeal withdrawal, Ripple and the SEC jointly sought to settle the case with a significantly reduced penalty and the vacatur of the court’s injunction. Their proposal would have had Ripple pay $50 million to the SEC and return $25 million from escrow to Ripple, reducing the original $125 million fine by 60 %. However, on June 26, 2025, Judge Torres denied this settlement motion, ruling that vacating an injunction and altering a civil judgment without “exceptional circumstances” would not serve the public interest.
In her written opinion, the judge emphasized that final judgments “belong to the legal community as a whole” and should remain intact unless a court finds that vacatur would benefit the public interest. She concluded that the settlement bid did not demonstrate any material change in circumstances since the 2023 ruling, thereby justifying her refusal to approve the parties’ joint proposal.
Financial Implications: Accepting the $125 Million Penalty
With appeals withdrawn and the settlement rejected, Ripple will accept the full $125 million civil sanction originally imposed for its institutional XRP sales. Under the court’s 2023 decision, public exchange sales of XRP were deemed lawful, but the $728 million in programmatic and institutional sales violated U.S. securities laws. Consequently, the $125 million penalty reflects only the institutional portion.
Ripple has already escrowed funds to satisfy the penalty; the company plans to proceed with payment promptly to usher in legal certainty. The withdrawal of appeals means no further legal costs or uncertainties tied to appellate proceedings, allowing Ripple to reallocate resources toward product development and strategic partnerships.
Market Reaction and ETF Prospects
In the immediate aftermath of the announcement, XRP’s price experienced a sharp uptick. On June 27, XRP traded near $2.09, up over 5 % on heavy volume, reflecting renewed investor confidence in the asset’s regulatory clarity . Industry observers noted that removing the cloud of an active appeal could smooth the path for financial institutions to consider XRP in their operations.
Moreover, according to betting market data from Polymarket, the probability of an XRP-spot ETF approval by December 2025 has climbed to 88 %, up from 75.9 % on June 27. Market participants point to Ripple’s robust engagement with the SEC’s Crypto Asset and Cyber Unit earlier this year, as well as institutional momentum behind existing BTC and ETH ETFs, as drivers of the optimistic ETF outlook.
Opacity over regulatory risk was the principal obstacle to ETF filings. Now, with legal clarity, asset managers may feel emboldened to file for an XRP-spot ETF, potentially catalyzing fresh inflows. Analysts forecast that an ETF approval could drive XRP above $5 in the medium term, contingent on broader market conditions and macroeconomic factors.
Future Outlook: Building the Internet of Value
In his announcement, Garlinghouse stated, “We’re closing this chapter once and for all, and focusing on what’s most important — building the Internet of Value”. Ripple intends to double down on enterprise payments, central bank digital currency (CBDC) pilots, and partnerships with financial institutions across Asia, Europe, and the Middle East.
The resolution removes regulatory ambiguities that have hampered corporate partnerships and constrained Ripple’s ability to innovate. Internally, the company is expected to accelerate development of new products like On-Demand Liquidity for cross-border settlements and expanded use of the XRP Ledger for tokenization of real-world assets.
Ripple’s leadership has also hinted at future litigation related to other token offerings in the broader industry, signaling that the firm may leverage its legal victory to advocate for clearer, crypto-friendly regulations.
Conclusion
Ripple’s withdrawal of its cross-appeal alongside the SEC’s expected retreat from appellate proceedings marks a watershed moment in cryptocurrency regulation. By accepting the full $125 million penalty and preserving the court’s injunction, both parties have chosen certainty over continued litigation. Investors rewarded this clarity with a notable price rally, and the odds of an XRP-spot ETF have jumped to unprecedented levels.
With the legal dispute behind it, Ripple can now refocus on its core mission — advancing the Internet of Value through innovative payment solutions, tokenization, and global partnerships. For XRP holders and the broader crypto ecosystem, the end of this saga signals a new era of regulatory predictability and growth potential.
