Ripple’s $125 million penalty in the ongoing XRP lawsuit remains unpaid as the funds are still being held in escrow. Former SEC attorney Marc Fagel confirmed the update, stating the money is yet to reach the U.S. Treasury as both parties await final legal steps.

Ripple’s $125M Penalty in Escrow, Not Yet Transferred

Marc Fagel, a former U.S. Securities and Exchange Commission (SEC) lawyer, clarified that Ripple has deposited the $125 million fine, but it remains in escrow. The funds are currently held in a bank account controlled by Ripple’s legal counsel.

“To clarify: neither party has dismissed its appeal; they will presumably do so jointly once the SEC votes to approve dismissal,” Fagel wrote in a recent post on X. “At that point, the penalty, in escrow at Ripple’s counsel’s bank, will go to the US 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.

— Marc Fagel (@Marc_Fagel) July 31, 2025

The clarification was made after rumors surfaced claiming Ripple had already paid the penalty. Some posts also claimed that Ripple used XRP tokens for payment, which Fagel also denied in earlier comments. He confirmed that the amount deposited is in fiat currency, not digital assets.

Appeals Remain Active as Case Awaits Final Resolution

Although Ripple has agreed to pay the penalty, the legal case is still open. The SEC’s appeal is active, and Ripple’s cross-appeal is also pending. According to Fagel, both parties must formally withdraw their appeals before the case can be fully closed.

Judge Analisa Torres’s ruling from May 2023, which partially favored Ripple, will only become final once the appeals process is concluded. Ripple’s deposit of the penalty into escrow is viewed as a step toward resolution, but the delay in SEC action continues to hinder the process.

The penalty was part of a broader settlement agreement involving Ripple’s institutional XRP sales. The settlement addressed charges that Ripple had sold unregistered securities, but did not resolve the SEC’s appeal over programmatic sales and other legal aspects.

Regulatory Developments May Influence XRP Lawsuit Progress

The latest declarations of regulation in the United States can have an impact on the speed and the final result of the current crypto-related lawsuits, such as the Ripple scenario. Recently, SEC Chair Paul Atkins introduced the so-called. Project Crypto Initiative, which is aimed at modernizing U.S. securities regulations in the context of digital assets.

Also, in-kind creation and redemptions of crypto exchange-traded products (ETPs) have been authorized by the SEC, which has led to more similarity to commodity-backed funds, like those grounded on gold. This development has the potential to sustain the legal underpinnings of such a token as XRP.

Even crypto attorney Bill Morgan touted a change in tone in the recent public statements by the SEC. It also appears that the agency is currently targeting fewer digital assets as securities, which consequently minimizes the prospects of the agency taking a blanket approach to large assets like XRP.

Final Transfer Depends on SEC’s Appeal Withdrawal

Although Ripple has made efforts to cover the damages to its contention, the fine against the company of 125 million cannot be pulled out until the SEC pulls off its appeal. The money will remain in escrow until the two parties inform the court that they want to withdraw any of their pending objections.

The punishment is at hand. There is no technical hindrance to payment; it is all about waiting on the process,” Fagel said. Rather, it is the result of pending motions in law.

As long as the appeals persist and the judge upholds the settlement, the XRP lawsuit will not apply. The escrowed penalty is a testament to the legal uncertainty that exists until a decision is finally made by regulators and the courts.