In a significant development that could potentially signal the closure of one of the most closely monitored legal confrontations in the history of cryptocurrency, Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have come together to file a joint motion to pause their appeals in the ongoing XRP lawsuit. This motion is viewed by many as a key turning point in the lengthy litigation saga.

The motion, submitted on April 10 to the Second Circuit Court of Appeals, indicates that both parties have reached an “agreement-in-principle.” They are now seeking a negotiated resolution to their extensive legal battle, aiming to resolve a conflict that has significant implications for the future of cryptocurrency regulation in the United States.

A Major Shift in the XRP Lawsuit

The XRP lawsuit, which commenced in December 2020, was instigated by allegations from the SEC that Ripple had engaged in the sale of XRP as an unregistered security. Over the years, this case has evolved into a comprehensive debate about how different forms of cryptocurrency should be classified under U.S. law. Ripple’s position is clear: it argues that XRP should be recognized as a digital asset rather than a security.

Ripple and the SEC have jointly paused their XRP lawsuit appeals while awaiting the commission’s approval of a settlement. Source: James K. Filan via X

After more than four years of litigation, Ripple and the SEC have jointly requested the court to pause their appeal and cross-appeal, effectively halting all ongoing legal actions for a period of 60 days. This motion aims to “conserve judicial and party resources while both parties continue to seek a mutually beneficial resolution.” The request also cancels the previously scheduled April 16 deadline for Ripple to respond to the SEC’s appeal brief. Ripple’s defense attorney, James Filan, confirmed this in a statement on social media, emphasizing, “The settlement is pending Commission approval. No brief will be filed on April 16.”

Ripple’s Partial legal Win and Path to Resolution

The legal landscape shifted significantly in July 2023, when Judge Analisa Torres ruled that while Ripple’s institutional sales of XRP did violate securities regulations, the programmatic sales conducted on public exchanges did not. This mixed ruling provided Ripple with a partial but critical victory and paved the way for the possibility of settlement discussions.

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Source: Luciferisfalselight via X

Ripple CEO Brad Garlinghouse proclaimed the “end of the case” last month, with Chief legal Officer Stuart Alderoty stating that Ripple would not pursue a cross-appeal. The latest motion submitted to the court encompasses all remaining aspects of litigation, including claims against Garlinghouse and co-founder Chris Larsen, further fueling speculation that a conclusive settlement might soon be forthcoming.

The timing of this legal maneuvering has raised eyebrows, particularly with the recent change in leadership at the SEC. Paul Atkins, a known advocate for cryptocurrency, was confirmed as the new SEC Chair on April 9. His formal swearing-in could take place as early as April 12, and some speculate that the SEC may be waiting for Atkins to formalize his position before moving to officially approve the proposed settlement.

In the words of one user on social media: “The SEC is ready to settle but is waiting for Atkins to take the helm… to start off with dropping the biggest case of their career and begin with a significant win.” This sentiment encapsulates the anticipation surrounding this potential resolution.

Market Reactions and XRP Price Forecast

Despite the legal progress made through the joint motion, the price of XRP experienced a slight decrease of 4.24% on April 10, bringing it down to $1.9649. This decline erases part of the 14.32% gain from the previous trading session. Market experts believe that current pricing has largely factored in expectations of a positive outcome.

XRP price made a notable rise beyond the $2 resistance level following news regarding the Ripple SEC lawsuit. Source: Mindfullylost on TradingView

Currently, XRP trades at $2.01 with a 24-hour trading volume amounting to $4.14 billion, according to CoinMarketCap. Analyst Egrag Crypto remains optimistic regarding XRP’s price trajectory, suggesting that macroeconomic changes and enhanced regulatory clarity could drive the price up to unprecedented levels, with predictions hitting as high as $27 in the not-so-distant future.

Additionally, the approval of the Teucrium 2X Long Daily XRP ETF by NYSE Arca has injected further momentum into the market. This move reflects an increasing interest from institutional investors and signifies growing confidence in XRP as a compliant and viable digital asset.

Implications for Ripple and the Crypto Industry

A final settlement in this case would not only conclude the Ripple lawsuit but also potentially set significant precedents for the overall regulatory environment for cryptocurrencies in the United States. Ripple is expected to pay a diminished civil penalty, speculated to be around $50 million, a substantial reduction from the initial $125 million the SEC originally proposed.

This resolution could allow Ripple to mend and enhance its institutional relationships, paving the way for broader operational growth within the U.S. market. It may also strengthen Ripple’s collaborations with established financial institutions, such as Bank of America, and facilitate the adoption of the Ripple ledger as a compliant and robust blockchain network for cross-border payments.

A legal expert discussing this matter remarked, “The SEC’s decision to halt litigation and negotiate a settlement with Ripple, coupled with the withdrawal of lawsuits against entities like Coinbase and Kraken, points to a broader regulatory realignment in the industry.” This illustrates the increasing shift toward more cooperation between regulators and crypto firms.

As of now, XRP is trading around $2.06, marking a 2.36% increase over the last 24 hours. Source: XRP Liquid Index (XRPLX) via Brave New Coin

If the settlement receives final approval, it will not only redefine the SEC’s regulatory enforcement posture towards cryptocurrencies but could also initiate a shift away from wide-ranging crackdowns to focused and negotiated regulatory clarity. This outcome could prove to be a watershed moment for the entire crypto industry.

Looking Ahead

As the involved parties wait for official approval from the SEC commissioners, the next 60 days will be crucial. Should the settlement move forward, Ripple could emerge as a guiding example for compliance in the cryptocurrency landscape, potentially ushering in a new era of collaboration between blockchain firms and U.S. regulatory bodies.

For XRP holders and the broader crypto community, this development presents a glimmer of hope for a prolonged resolution to what has been a protracted legal dispute that has significantly influenced the regulatory dialogue surrounding digital assets. Although it remains to be seen whether the price of XRP will experience a substantial surge following the announcement of a final settlement, one thing is clear: the Ripple market is preparing for the next evolution in this narrative.

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