The Ripple SEC settlement effectively closed on August 7, 2025, when the Securities and Exchange Commission and Ripple Labs jointly dismissed their appeals in the Second Circuit, leaving in place a $125,035,150 civil penalty and a permanent injunction against Ripple’s unregistered institutional sales of XRP.1SEC.gov. Litigation Release No. 263692Reuters. SEC Ends Lawsuit Against Ripple An earlier deal that would have cut the penalty to $50 million and dissolved the injunction was rejected twice by the district judge, so the parties simply abandoned their appeals instead.
How the Case Ended in August 2025
Both sides filed a joint stipulation of dismissal on August 7, 2025, ending the SEC’s appeal and Ripple’s cross-appeal. The August 2024 final judgment from Judge Analisa Torres remained fully in force: the civil penalty of $125,035,150 and a permanent injunction barring Ripple from future unregistered securities sales.1SEC.gov. Litigation Release No. 26369 Each side agreed to bear its own legal costs.3Yahoo Finance. SEC Ripple End Appeals
The dismissal also preserved Judge Torres’s July 2023 summary judgment, the ruling the crypto industry cared most about. Because the case never reached appellate review, that decision stands as binding law only in the Southern District of New York.3Yahoo Finance. SEC Ripple End Appeals
The $50 Million Settlement That Failed
What the parties actually wanted was a smaller deal, and they nearly got it. On April 10, 2025, the SEC and Ripple told the Second Circuit they had reached an agreement-in-principle and asked the court to hold the appeal in abeyance.4Business CCH. SEC v. Ripple Labs Joint Motion5SEC.gov. Litigation Release No. 263066American Banker. SEC Ripple Settlement Agreement Drops Fine to $50 Million
The problem was that modifying the August 2024 final judgment required approval from the district court, and Judge Torres refused. On May 15, 2025, she rejected the joint request as “procedurally improper,” noting the court lacked jurisdiction while the case was on appeal.7CoinDesk. Ripple SEC Bid for XRP Settlement Rejected by Judge Citing Procedural Flaws8DL News. Ripple $50M Settlement Blocked9Nutter McClennen & Fish. SEC v. Ripple Labs Order
Unable to shrink the penalty or dissolve the injunction through the district court, the parties took the only remaining exit and dropped their appeals six weeks later.
What Ripple Actually Owes and Can’t Do
Ripple pays the full $125,035,150 civil penalty imposed in the August 2024 remedies ruling. That figure was itself a significant loss for the SEC at the trial-court stage: the agency had asked for close to $2 billion, including $876 million in disgorgement and $198 million in prejudgment interest. Judge Torres denied disgorgement and interest and set the penalty far below what the SEC sought.10Banking Dive. Ripple XRP $125 Million Penalty SEC Securities Ruling She emphasized that the 1,278 institutional transactions at issue did not involve “fraud, misappropriation, or other more culpable conduct,” and that the SEC had not shown substantial investor losses.11Decrypt. Ripple Fine
The permanent injunction is the more consequential piece going forward. It bars Ripple from future unregistered securities sales, which as a practical matter means it cannot resume the direct institutional XRP sales the court found unlawful.
One day after the appeals were dismissed, on August 8, 2025, the SEC granted Ripple a “bad actor” waiver under Rule 506(d)(2)(ii). Without it, the injunction would have disqualified Ripple from relying on Regulation D exemptions for private placements for five years. The Commission noted it had previously intended to resolve the case in a way that would have eliminated the injunction entirely, and said denying the exemption was “not necessary under the circumstances.”12SEC.gov. Securities Act Release No. 11383
The 2023 Ruling That Survived
The reason the settlement matters beyond Ripple’s balance sheet is that the district court’s July 13, 2023, summary judgment stands untouched. Judge Torres ruled that XRP is not inherently a security. Whether any particular sale violates federal law depends on how the sale happened.
The court split Ripple’s XRP sales into two categories under the Supreme Court’s Howey test:
- Institutional sales, in which Ripple sold XRP directly to hedge funds and other sophisticated buyers under written contracts, satisfied all three prongs of Howey. Buyers invested money in a common enterprise and had reason, from Ripple’s marketing, to expect profits from the company’s efforts. These sales violated Section 5 of the Securities Act.13U.S. District Court, S.D.N.Y. SEC v. Ripple Labs, Summary Judgment Opinion
- Programmatic sales through blind, algorithmic transactions on digital-asset exchanges did not. Buyers on exchanges could not know whether their money reached Ripple or another seller, so the court found it “unreasonable” to conclude they expected profits from Ripple’s specific efforts. The third Howey prong wasn’t satisfied.13U.S. District Court, S.D.N.Y. SEC v. Ripple Labs, Summary Judgment Opinion
It was the first federal ruling to directly address whether secondary-market digital asset transactions are securities sales.14Investopedia. SEC vs. Ripple Because the appeals were dismissed rather than decided, that framework was never tested by the Second Circuit. It carries binding force only in the Southern District of New York; other courts remain free to disagree.
The SEC also dropped its remaining aiding-and-abetting claims against CEO Brad Garlinghouse and co-founder Christian Larsen in October 2023, after Judge Torres declined to certify an interlocutory appeal of her summary judgment. The dismissal as to Garlinghouse was with prejudice.15Cleary Gottlieb. Ripple CEO Brad Garlinghouse in Dismissal of All SEC Claims
Why the SEC Walked Away
The retreat has to be read against a shift in agency leadership. A new administration took office in January 2025, and the SEC began unwinding crypto enforcement actions initiated under former Chair Gary Gensler. The agency dismissed or closed cases against Coinbase, Binance, Kraken, and others, often citing a need to “reform and renew its regulatory approach to the crypto industry.”16Harvard Law School Forum on Corporate Governance. SEC Enforcement Year in Review Under Chairman Paul Atkins, sworn in April 21, 2025, standalone enforcement actions fell 27% year over year, and total monetary penalties against crypto market participants dropped to $142 million in 2025, less than 3% of the 2024 figure.17Cornerstone Research. SEC Cryptocurrency Enforcement Update
The Ripple deal was not unanimous inside the Commission. Commissioner Caroline Crenshaw dissented publicly, calling it “a tremendous disservice to the investing public” that “undermines the court’s role in interpreting our securities laws.”18The Block. SEC Commissioner Crenshaw Blasts Ripple Settlement She argued that returning $75 million and dissolving the injunction would nullify a penalty the court had carefully crafted and leave the agency without a mechanism to enforce the order if Ripple resumed unregistered institutional sales.19SEC.gov. Crenshaw Statement on Ripple Settlement Crenshaw said the SEC was avoiding an appellate ruling because it feared the Second Circuit would uphold the agency’s original positions, complicating the new leadership’s pullback.20Banking Dive. Ripple SEC Crenshaw Dissent The SEC itself framed the deal as based on its “judgment that such resolution will facilitate the commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits.”
Aftermath for XRP and Ripple
XRP rose 11% after the case resolved, from $2.90 to a high of $3.27. Institutional trading volume jumped 208% to $12.4 billion, and derivatives open interest climbed 15% to $5.9 billion.21CoinDesk. XRP Rallies Above $3.25 After Ripple SEC Settlement
Asset managers moved quickly on exchange-traded funds. Grayscale, 21Shares, Bitwise, Canary Capital, WisdomTree, Franklin Templeton, and CoinShares were among the firms that filed for spot XRP ETFs. ProShares received approval for a leveraged XRP ETF in mid-July 2025, the first XRP ETF listed in the U.S., with final SEC decisions on the pending spot applications expected in October 2025.22Coinpedia. Full List of XRP ETFs Awaiting SEC Approval
Ripple itself has restructured around channels the injunction does not touch. It launched the RLUSD stablecoin in December 2024. In April 2025 it announced a $1.25 billion acquisition of prime brokerage Hidden Road, which closed in October 2025 and was rebranded as Ripple Prime.23CoinDesk. Ripple Prime Institutional Trading and Financing Desk24Ripple. Ripple Prime Brokerage The company has also applied for a national trust bank charter.25Crypto.news. The XRP Lawsuit Endgame: What’s Left to Resolve President Monica Long said in 2025 that Ripple has “no plans or timeline” for an IPO, citing a $500 million strategic investment round from Citadel Securities, Pantera Capital, Galaxy Digital, and others, along with a $1 billion tender offer that valued the company at $40 billion.26TradingView. Ripple Rejects IPO Plans
The five-year enforcement action is over. The penalty is paid, the injunction remains, the 2023 ruling stands as district-court precedent, and both the SEC and Ripple have moved on for their own reasons.