XRP Lawsuit Update: Ripple’s $125M Penalty Still In Escrow, Not Paid to Treasury Yet

Former SEC lawyer Marc Fagel has clarified that Ripple’s $125M penalty in the XRP lawsuit case still remains held in escrow. He made this statement in response to claims suggesting the payment had already been sent to the U.S. Treasury.

Lawyer Says Ripple’s Payment Paid, But Still Waiting in Escrow

Former SEC attorney Marc Fagel responded to claims circulating online, suggesting the penalty imposed on Ripple by the court had been paid to the US Treasury. Fagel explained in a recent X post that Ripple has indeed deposited the $125 million penalty. He then further highlighted that the funds are currently in an escrow account controlled by Ripple’s legal counsel, rather than transferred directly to the U.S. Treasury.

To clarify: neither party has dismissed its appeal; they will presumably do so jointly once the SEC votes to approve dismissal. At that point, the penalty, in escrow at Ripple’s counsel’s bank, will go to the US Treasury.

Fagel had previously refuted claims that Ripple paid its penalty in XRP tokens instead of cash. This likely fueled speculation that the company had already transferred the funds to the U.S. Treasury.

Furthermore, earlier reports had suggested Ripple had voluntarily withdrawn its cross-appeal, signaling its willingness to settle. Yet, as Fagel noted in the post, the SEC’s own appeal remains pending. Until both sides formally drop their appeals, Judge Torres’s May 2023 ruling won’t become final.

This legal deadlock keeps the XRP lawsuit unresolved despite Ripple’s move to deposit the penalty. Fagel dismissed recent rumors suggesting Ripple had already finalized the payment process. He also stressed that only after the SEC formally acts will the funds leave escrow.

New Regulatory Shifts Could Influence XRP Lawsuit Outcome

While the XRP lawsuit’s appeals process is still pending, broader regulatory shifts in Washington might help clear the path to a final resolution. This week, SEC Chair Paul Atkins unveiled the “Project Crypto” initiative, aimed at modernizing U.S. securities regulations to accommodate digital assets better and encourage innovation.

Additionally, new approvals for in-kind creations and redemptions for cryptocurrency ETPs were announced by SEC Chairman Paul Atkins. This might bring them closer to funds backed by commodities, such as gold. This changing position might indicate that the SEC is becoming more lenient. It might result in speedier settlements or the dismissal of ongoing cryptocurrency lawsuits, such as the one involving XRP.

Adding to this optimism, crypto lawyer Bill Morgan pointed out that the SEC’s language has shifted significantly. Instead of labeling most cryptocurrencies as securities, recent statements from SEC leaders suggest only a smaller subset may fall under that definition. Separately, the Trump administration released its long-awaited crypto policy report. 

Despite Ripple’s readiness to conclude its side of the case, the final settlement still hinges on the SEC withdrawing its appeal, a process that could stretch on for weeks. Once both appeals are dropped, the $125 million currently in escrow will be formally transferred to the Treasury.