Ripple has a tough decision to make as the US Securities and Exchange Commission has dropped settlement demands

Compass Investment
2 min readJun 17, 2024

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  • Ripple Inc. faces a choice. Accept a $103 million settlement with the U.S. Securities and Exchange Commission amid continued uncertainty or risk a harsher punishment in court.
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Ripple Inc. faces a choice. Accept a $103 million settlement with the U. S. Securities and Exchange Commission amid continued uncertainty or risk a harsher punishment in court.

A major development in the legal dispute between Ripple Labs and the SEC: the SEC has reduced its settlement demand from $2 billion to $102.6 million. This leaves Ripple with a difficult choice: accept the settlement and live with the uncertainty of XRP’s legal status or get involved in a risky legal battle.

The SEC’s initial $2 billion fine shocked the cryptocurrency community. In response, Ripple offered $10 million on the grounds that the SEC had paid between 0.6% and 1.8% of the defendant’s revenue in the past. Ripple also cited its recent settlement with Terraform Labs, which included a $4.4 billion payment for damages and business interruption; the SEC rejected this comparison, emphasizing that Terraform’s bankruptcy and business interruption were material and that Ripple was continuing its business and had not agreed to any such terms.

The SEC argued that the $102.6 million settlement was necessary to prevent future fraud in the crypto industry. They argued that Ripple’s refusal to continue its business and agree to a fix justified the fine. While agreeing to a settlement may bring financial relief and demonstrate cooperation with regulators, XRP’s status as a security remains unclear, which could deter institutional investors and affect market performance.

Refusal to settle could lead to a lengthy and costly legal battle with an uncertain outcome. A judge could impose a harsher penalty than the one proposed by the SEC, which would pose a significant risk to Ripple. Such a scenario could have serious implications for Ripple’s business and the cryptocurrency market as a whole.

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