SEC Commissioner states that the lawsuit settlement between Ripple Labs and the Securities and Exchange Commission (SEC) “does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws.”
On May 8, 2025, Commissioner Caroline A. Creshaw stated why she did not support the settlement.
“First, the settlement undermines the court’s order.” Although the agreement states that neither the SEC nor Ripple will seek to “vacate or amend” any part of the court’s summary judgment, however, in the event Ripple sells XRP tokens to institutional investors blatantly defying the court ruling, the SEC will be powerless to and will not be able to do anything about it. The hours spent at court for this matter will be futile, said the commissioner.
“Second, the settlement undermines the SEC and its enforcement program,” as it derails the basic application of facts to the law —an important aspect of any effective law enforcement program. Recently, the SEC entrusted its Crypto Task Force to remodel its regulatory framework. Although the regulatory framework is not yet finalized, even if the Task Force changes the regulatory framework, it does not alter the rules that were in play when Ripple violated them.
Since there is no hint of what those future rules might look like or how long it will take to make and establish, if ever, it means “we are today accepting a diluted settlement, that erases the investor protections we already won, based on a non-existent framework that may or may not come to fruition..”
Caroline further stated, “Third, the settlement is not in the best interests of the investors and markets that our agency is tasked with serving and protecting,” as it created more questions than answers. Does the resolution suggest to the market that we agree with the court’s ruling? What is the legal effect of the ruling in place?
