Ripple and SEC Agree to Hold Appeals in Abeyance
Agreement in Principle to Resolve Long-Standing Case
The US Securities and Exchange Commission (SEC) and Ripple Labs have jointly filed a motion to hold their appeals in abeyance, citing an agreement in principle to resolve their long-standing case. The motion, submitted to the United States Court of Appeals for the Second Circuit on April 10, seeks to suspend proceedings while the parties finalize the settlement terms, pending the SEC’s formal approval.
Settlement Terms Await Commission Approval
According to the filing shared by lawyer James Filan, the agreement would resolve not only the SEC’s appeal but also Ripple’s cross-appeal and claims against Ripple executives Brad Garlinghouse and Chris Larsen. If granted, the motion would pause the appeals process and eliminate the requirement for the parties to submit briefs by the previously scheduled April 16 deadline.
The Case Background
The case stems from a December 2020 enforcement action in which the SEC alleged that Ripple’s sales of XRP constituted unregistered securities offerings. In July 2023, a federal judge ruled that XRP sales to institutional investors violated securities laws, while programmatic sales on secondary markets did not. That partial ruling set the stage for the appeals now placed on hold.
Ripple’s Operations and Regulatory Scrutiny
In the ensuing months, Ripple has secured multiple legal wins while facing ongoing regulatory scrutiny. The company has maintained that its operations comply with current securities laws and has called for clear legislative guidance to distinguish digital assets from traditional securities.
Settlement Terms
Ripple recently agreed to pay a $50 million civil penalty and withdraw its cross-appeal as part of the broader resolution effort. The proposed settlement is still subject to internal review and formal approval by the Commission. If approved, the parties may seek an indicative ruling from the US District Court for the Southern District of New York, where the case originated.
Conservation of Judicial and Party Resources
The motion emphasizes that pausing the appeals process would conserve judicial and party resources while negotiations are finalized. The parties have requested that the Commission file a status report within 60 days of any stay order issued by the appellate court. Moreover, the filing states that the delay would prejudice no party and that all parties to the appeal and cross-appeal have consented.
Conclusion
The agreement to hold the appeals in abeyance marks a significant development in the long-standing dispute between Ripple and the SEC. If the motion is granted, the parties will have additional time to finalize the settlement terms and potentially close the case. The outcome could have significant implications for the digital asset industry, providing clarity on the regulatory framework and potentially paving the way for greater adoption.
FAQs
Q: What is the agreement between Ripple and the SEC?
A: The agreement is an agreement in principle to resolve the long-standing case, pending formal approval by the SEC.
Q: What are the terms of the proposed settlement?
A: Ripple has agreed to pay a $50 million civil penalty and withdraw its cross-appeal.
Q: What is the status of the appeals process?
A: The parties have jointly filed a motion to hold the appeals in abeyance, pending the SEC’s formal approval.
Q: What are the implications of the agreement for the digital asset industry?
A: The outcome could provide clarity on the regulatory framework and potentially pave the way for greater adoption of digital assets.
Q: What is the next step in the process?
A: If the motion is granted, the parties will finalize the settlement terms and seek an indicative ruling from the US District Court for the Southern District of New York.
