The U.S. Securities and Exchange Commission (SEC) announced on May 8 that a settlement agreement has been reached in the XRP lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Christian Larsen.
According to the agreement, the SEC and Ripple will jointly file a motion with the court to lift the injunction against Ripple and reduce Ripple’s penalty to $50 million as part of the final judgment dated August 7, 2024. According to this redistribution, only $50 million will be paid to the SEC, while the remaining amount will be returned to Ripple.
While the settlement of the SEC Ripple case was welcomed by the cryptocurrency industry, SEC member Caroline Crenshaw stated that she opposed the Ripple deal due to investor protection concerns.
Cryptocurrency skeptic Crenshaw spoke out against the agency’s decision to offer Ripple a settlement letter in its case.
The SEC member argued that if the deal is approved, the settlement would weaken the court’s role in interpreting securities laws and would fail to protect investors and markets.
Crenshaw said the settlement “razes” both the civil penalty and the injunction, effectively nullifying the effect of the court’s decision.
“This settlement does a grave disservice to the SEC’s investor protections and weakens the court’s role in interpreting our securities laws. If Judge Torres accepts the settlement, it will eliminate investor protections we have already won and leave a regulatory vacuum until the crypto task force can create a regulatory framework.
“As a result, the SEC-Ripple settlement is not in the best interests of the investors and markets our agency is charged with serving and protecting. It raises more questions than answers.”
The SEC first filed a lawsuit against Ripple Labs in December 2020, accusing it of illegally selling its native token, XRP, as an unregistered security.
*This is not investment advice.
