The Ripple versus SEC case continues to raise many questions. We will review key court decisions, financial implications for Ripple, and the company's prospects.
XRP is Not a Security—But There Are Nuances
According to a court ruling from July 2023, XRP is not considered a security when sold openly on the market. This means ordinary trading of XRP by retail investors is fully legal and safe from regulatory scrutiny. However, the court found that direct sales of XRP to institutional investors totaling $728 million were unregistered securities offerings. Consequently, Ripple is under a permanent injunction that bans such sales unless they are properly registered or meet certain legal conditions.
Ripple Paid a $125 Million Fine
Ripple has already paid the $125 million fine into an escrow account controlled by a third party while appeals and settlement talks are underway. Both Ripple and the SEC sought the judge's approval to reduce this penalty to $50 million and lift the institutional sales ban; however, Judge Torres rejected this request on June 26, 2025. She insisted that the original injunction and penalty remain in place until the appeals process is completed.
What Can Ripple Do Next?
Despite the restrictions, Ripple can still sell XRP to institutions, but only by adhering to the U.S. Securities Act of 1933. Additionally, Ripple may seek certain exemptions, such as Rule 506(b), allowing sales to unlimited accredited investors and a limited number of non-accredited ones, or Rule 506(c), permitting public promotion as long as every buyer is verified as an accredited investor. In both instances, Ripple must file a Form D with the SEC within 15 days of any sale.
Despite current restrictions and legal complexities, Ripple continues to operate and sell XRP on open markets. The court rulings are more about shaping the legal framework than shutting down the entity.
