SEC’s Crenshaw slams Ripple settlement

U.S. SEC Commissioner Caroline A. Crenshaw has publicly opposed the agency’s settlement with Ripple Labs, warning that it creates a "regulatory vacuum" and undermines investor protections and the SEC’s crypto enforcement efforts.

She criticized the settlement for effectively erasing the civil penalties and injunction imposed by the court, which had ruled that Ripple's institutional sales of XRP were unregistered securities offerings.

The settlement requires Ripple to pay $125 million in penalties but returns $75 million from escrow to the company and dissolves the injunction restricting future XRP sales.

The settlement nullifies the court’s injunction, potentially allowing Ripple to sell unregistered XRP again without consequence, which undermines the court’s role in interpreting securities laws.

She warned that the deal signals a broader retreat by the SEC from crypto enforcement, leaving no clear regulatory framework to govern crypto securities, thus creating an open-ended regulatory gap.

The settlement raises more questions than answers about investor protections and market clarity, potentially harming the investing public.

She described the settlement as a "regulatory retreat" that subverts the clear and honest application of the law and does a tremendous disservice to investors.

Crenshaw urged judicial scrutiny of the settlement and warned that such decisions could erode public confidence in the SEC’s integrity and mandate.

Her dissent highlights internal divisions within the SEC and concerns that the agency is weakening its regulatory position on crypto enforcement, possibly setting a dangerous precedent for the future.

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