SEC Commissioner Caroline Crenshaw has publicly criticized the agency’s proposed settlement with Ripple Labs, expressing concerns that it could undermine the SEC’s authority in regulating the cryptocurrency industry.
On May 8, 2025, the U.S. Securities and Exchange Commission (SEC) and Ripple Labs reached a settlement agreement, concluding a legal battle that began in December 2020.
Under the terms, Ripple will pay a $50 million penalty, which is significantly reduced from the original $125 million fine imposed by Judge Analisa Torres in August 2024.
The remaining $75 million, currently held in escrow, is to be returned to Ripple, pending court approval.
This settlement follows a court ruling that found Ripple’s institutional sales of XRP violated securities laws, while sales on public exchanges did not.
Both parties have agreed to drop their respective appeals if the court lifts the injunction against Ripple, effectively ending one of the most closely watched cases in the crypto industry.
Commissioner Crenshaw’s Critique Highlights Internal SEC Tensions
SEC Commissioner Caroline Crenshaw has publicly criticized the settlement, expressing concerns that it undermines investor protections and the agency’s authority.
In a statement, Crenshaw warned that the agreement “does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws.”
She further argued that the settlement could create a “regulatory vacuum,” leaving investors vulnerable until a comprehensive regulatory framework is established.
Crenshaw’s dissent shows internal divisions within the SEC regarding the agency’s evolving approach to crypto enforcement.
The settlement also depicts a shift of the SEC retreating from aggressive crypto enforcement actions, as seen in the dropping of lawsuits against other crypto firms like Coinbase and Kraken.
The SEC is rolling back a barrage of Gensler-era enforcement actions. What does that mean for crypto?#SEC #Regulation #Crypto https://t.co/D3VZuNrl29
— Cryptonews.com (@cryptonews) March 10, 2025
Notably, the settlement has had immediate market implications, with XRP’s price experiencing a quick surge.
As of the latest data, XRP is trading at approximately $2.38, reflecting investor optimism following the resolution of the legal uncertainty.
What’s Next for the Ripple Case?
Even with the SEC and Ripple reaching an agreement on paper, the resolution of this high-profile lawsuit remains in flux.
Next Steps: Judge Torres needs to provide an indicative ruling as to whether the Court would: (1) dissolve the injunction and release the escrow with $50 million going to the SEC and the balance back to Ripple; (2) if Judge Torres provides the indicative ruling, the SEC and…
— James K. Filan
(@FilanLaw) May 8, 2025
According to ex-federal prosecutor James Filan, the first hurdle is Judge Analisa Torres’s indicative ruling.
The judge must formally agree to dissolve last August’s injunction and approve the return of $75 million from escrow. Only then can the real procedural machinery kick in.
Should Judge Torres signal her consent, both the SEC and Ripple plan to petition the Second Circuit Court of Appeals for a limited remand, sending the matter back to her courtroom to enter the agreed settlement order.
That step would trigger the official motion to vacate the injunction and redistribute the funds.
Once the injunction is lifted and the settlement funds are disbursed, the final act will be for both parties to jointly ask the Court of Appeals to dismiss the SEC’s appeal and Ripple’s cross-appeal.
At that point, after more than four years of litigation that began with the SEC’s December 2020 lawsuit alleging XRP’s unregistered securities offerings, the case would finally draw to a close.
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