The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) is finally coming to a close. The company has agreed to drop its cross-appeal against the SEC, ending a dispute that has lasted since December 2020.
A Long and Fierce Battle Ends
The SEC originally sued Ripple in December 2020, accusing the company of conducting an unregistered securities offering through the sale of XRP. The case revolved around whether XRP should be classified as a security. In July 2023, Judge Analisa Torres ruled that Ripple's sales of XRP to retail investors were not securities transactions. However, it was determined that $728 million in sales to institutional investors violated securities laws. Initially, the SEC sought $1.9 billion in penalties, but in August 2024, the fine was reduced to $125 million, and an injunction was placed on Ripple’s institutional sales.
Why Did the SEC Back Down?
The SEC’s decision to drop its appeal signals a shift in its enforcement strategy. Since Gary Gensler resigned as SEC Chair in January, the agency has reversed several of its enforcement actions against crypto firms. Ripple CEO Brad Garlinghouse had hinted last week that the SEC was likely to end its appeal, and now that prediction has come true.
Impact on Future Regulations
The Ripple vs. SEC lawsuit has been one of the most important legal battles in the crypto space. Its resolution could influence how regulators approach other cryptocurrencies in the future. The case has also highlighted the need for clear crypto regulations in the U.S. Lawmakers are still debating how to classify digital assets, and this settlement might push Congress to establish more concrete guidelines.
The conclusion of the case between Ripple and the SEC opens a new chapter in cryptocurrency regulation and underscores the need for clearer rules in this area.
