SEC settles case with crypto firm with ties to the White House, commissioner calls it a 'tremendous disservice'
The agreement would allow the company to recover $75 million in fines.
The Securities and Exchange Commission reached a settlement with a crypto firm with ties to the White House in order to resolve a yearslong case against them, a move that has been criticized by a current SEC commissioner appointed by President Donald Trump who said it "undermines the SEC" and is "not a settlement [she] can support."
The agreement, as laid out in court, would allow the company -- Ripple Labs -- to recover most of a $125 million fine previously imposed on them, but still pay a significant portion.
Specifically, the agreement would have Ripple pay $50 million to the SEC, but the rest of the $125 million -- which is currently being held in an escrow account -- would return to the company, saving them approximately $75 million. The agreement would also vacate an injunction barring the company from committing further violations.
The settlement asks the court to grant the joint request to dissolve the injunction against Ripple and return the funds according to the agreement. The court now needs to approve the settlement, and then the parties will move to the higher courts to seek dismissal of their appeals, including Ripple's appeal of the fine.
In a statement, SEC Commissioner Caroline Crenshaw said, "This is not a settlement I can support" and urged the court to reject it.
Crenshaw, a Democrat, was appointed commissioner by Trump during his first term and was unanimously confirmed by the Senate in 2020. Her term expired in 2024, but she was renominated by former President Joe Biden. Commissioners can serve up to 18 months after their terms end.
Crenshaw, in her statement, said the settlement does a "tremendous disservice" to the public and said it goes hand in hand with what she says has been the "programmatic disassembly of the SEC’s crypto enforcement program."
"Our agency is, I fear, worried that the appellate court would issue a sound ruling that agreed with the legal arguments already laid out by the Commission," she wrote. "That would undermine the agency’s new apparent mission of dismantling our crypto enforcement program and eroding investor protections."
Ripple donated $5 million to Trump’s inaugural committee, sources previously told ABC News, and its CEO, Brad Garlinghouse, posted a photo after meeting with Trump in January. Garlinghouse also attended Trump's "crypto summit" at the White House earlier this year.
Garlinghouse had previously called the resolution "a victory - and a long overdue surrender by the SEC."
The SEC's case had been going on for over four years. In December 2020 -- while Trump was still in office -- the SEC sued Ripple and two executives for violating securities laws when they raised $1.4 billion through the sale of XRP crypto tokens.
A federal judge handed Ripple a landmark legal victory in 2023 when she ruled that the publicly sold tokens did not constitute a security, though she still fined the company $125 million because the tokens should have been sold to institutional investors. The SEC had appealed, then later dropped that ruling in March.
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