Ripple SEC Lawsuit News: Ripple and SEC File Joint Motion to End the $125M XRP Penalty Dispute

In a move that could mark the end of one of crypto’s most high-profile legal sagas, Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have jointly filed a motion to settle their long-running XRP lawsuit.

The proposal seeks to split a $125 million civil penalty, with $50 million paid to the SEC and the remaining $75 million returned to Ripple.

Ripple and SEC Seek Final Closure in XRP Lawsuit

According to a court filing dated June 12, 2025, both parties have asked Judge Analisa Torres of the Manhattan District Court to dissolve the injunction imposed on Ripple and approve modifications to the Final Judgment entered in August 2024. The motion also requests the release of $125 million currently held in escrow, which Ripple deposited under a previous order requiring 111% of the civil penalty to be held in an interest-bearing account.

The SEC and Ripple have jointly requested a Manhattan court to dissolve the injunction and release the $125 million civil penalty currently held in escrow. Source: Eleanor Terrett via X

The settlement would effectively bring an end to the SEC v. Ripple Labs Inc. case, which began in December 2020 when the SEC accused Ripple of conducting unregistered securities offerings through institutional sales of XRP.

Legal Twist Follows Years of Back-and-Forth

The XRP lawsuit has seen multiple twists since its inception. In July 2023, Judge Torres delivered a partial summary judgment ruling that Ripple’s programmatic XRP sales to retail buyers did not violate securities laws, but institutional sales did. The decision marked a turning point in how U.S. courts view digital asset classifications.

The motion proposes paying $50 million to the SEC and returning the remainder to Ripple as part of a broader effort to settle the case and avoid further legal proceedings. Source: Eleanor Terrett via X

Following that, the court imposed a $125 million civil penalty on Ripple in August 2024. However, the company contested the ruling and filed for an appeal. Earlier this year, in April 2025, both Ripple and the SEC agreed to pause their respective appeals to explore a settlement path. Their initial attempt to modify the judgment was denied in May 2025 due to procedural shortcomings—namely, the failure to demonstrate the “exceptional circumstances” required for such a modification.

The new motion aims to correct that, citing Second Circuit precedents such as Microsoft v. Baker and Major League Baseball, which allow judgment changes under exceptional conditions to facilitate settlements and avoid prolonged appeals.

XRP Lawsuit Update: Key Voices and Reactions

Legal expert and pro-XRP attorney Bill Morgan weighed in on the situation, stressing that the court’s acceptance of the “exceptional circumstances” argument is critical. “If Judge Torres does not accept the justification, the entire settlement falls apart,” Morgan said. “Without judgment modification, the parties would be forced to resume appeals.”

For the SEC, accepting a reduced penalty allows quicker fund recovery while preserving the substance of earlier rulings. For Ripple, the lifting of the injunction could remove barriers to its operations, including future partnerships with financial institutions like Ripple Bank of America or the expansion of the Ripple ledger ecosystem.

Ripple Price and XRP Market Implications

While the court’s final decision is pending, XRP price watchers and Ripple crypto investors are closely monitoring the outcome. At the time of writing, XRP is trading near $2.13 after experiencing recent volatility. Market analysts suggest that a favorable resolution could lead to renewed bullish momentum for the XRP value and overall Ripple market sentiment.

XRP was trading at around $2.131, down 4.88% in the last 24 hours at press time. Source: XRP Liquid Index (XRPLX) via Brave New Coin

This development also feeds into broader XRP news and the evolving stance of the SEC toward digital assets. Under its new chair, Paul Atkins, the agency has taken a softer regulatory approach, shifting from aggressive enforcement to more rule-based policymaking, affecting not just Ripple, but the entire crypto industry.

What’s Next in the Ripple SEC Lawsuit?

Should the court approve the joint motion, it would formally conclude a legal battle that has defined the regulatory debate around digital currencies in the U.S. The dissolution of the injunction would also allow Ripple to fully re-engage with business activities that had been stalled under the legal cloud.

However, if the motion is denied again, the XRP SEC lawsuit could drag on into late 2025, with continued uncertainty for investors, the Ripple exchange ecosystem, and Ripple’s global ambitions.

As the crypto community awaits Judge Torres’ ruling, the proposed settlement is being hailed as a potentially precedent-setting moment for digital asset regulation in the United States. For now, Ripple XRP news continues to dominate headlines—and with good reason.