Ripple and U.S. SEC jointly propose $125M settlement split to end XRP lawsuit

Ripple and the U.S. Securities and Exchange Commission have jointly proposed a settlement that would split a $125 million civil penalty, potentially ending one of the longest-running legal battles in the crypto industry.

According to a June 12 court filing shared on X by Crypto in America host Eleanor Terrett, the two parties are asking a Manhattan federal court to dissolve a previously issued injunction and release the $125 million currently held in escrow. Under the proposal, $50 million would be paid to the SEC, while the remaining $75 million would be returned to Ripple.

The proposed settlement follows a complicated legal history that began in 2020 when the SEC sued Ripple Labs for allegedly conducting unregistered securities offerings through institutional sales of XRP.

In July 2023, a federal judge ruled that Ripple’s programmatic XRP sales did not violate securities laws, but found the company liable for institutional sales. A $125 million penalty was imposed in August 2024 and placed in escrow during Ripple’s appeal.

In April 2025, the SEC and Ripple jointly moved to pause their appeals in order to explore a possible settlement. That motion was approved by the U.S. Court of Appeals for the Second Circuit, but a first attempt to settle the case was denied in May 2025 after the court said the parties hadn’t demonstrated “exceptional circumstances” required for such a request. The June 12 filing is a renewed effort that cites those required conditions.

The legal change comes as the SEC, led by new Chair Paul Atkins, has been reducing its enforcement-heavy crypto strategy since early 2025. Several high-profile crypto enforcement actions have been halted or dropped by the agency, which has stated that it plans to focus more on rulemaking than litigation.

Both Ripple and the SEC would move to withdraw their pending appeals if the court accepts the proposal, which would put an end to the case. For this to happen, the judge must still determine whether the circumstances justify modifying the original judgment and dissolving the injunction.

If approved, the deal would be a unique compromise in a widely followed case that has influenced the way U.S. law views digital assets. If denied, the case might go back to the appellate court, where it might continue beyond Q2.