Ripple and the U.S. Securities and Exchange Commission (SEC) have been locked in a protracted legal battle over XRP sales since 2020. Despite efforts to conclude the dispute, recent developments indicate that the saga is not yet officially over. The case centers on the SEC’s 2020 charge against Ripple and its executives for allegedly conducting a $1.3 billion unregistered securities offering through XRP sales. A 2023 ruling largely in Ripple’s favor offered a glimmer of hope for the crypto industry, but the SEC’s subsequent appeal, and Ripple’s cross-appeal, have kept the case alive.
Since President Donald Trump’s return to office, both parties have been working towards a resolution, aided by the appointment of crypto-friendly regulators. However, legal obstacles have persisted, preventing a definitive conclusion. Recent court rulings have further complicated the path to resolution, although there are signs that a settlement may finally be within reach.
Key Developments in the Ripple vs SEC Case
Ripple CEO Announces SEC’s Appeal Withdrawal
In March, Ripple CEO Brad Garlinghouse announced that the SEC intended to drop its appeal, marking a potential victory for Ripple and the broader crypto community. Garlinghouse’s statement sent XRP prices soaring by 14%, highlighting the market’s sensitivity to regulatory developments.
“This is it—the moment we’ve been waiting for. The SEC will drop its appeal—a resounding victory for Ripple, for crypto, every way you look at it,” Garlinghouse posted on X.
This announcement was part of a broader trend under President Trump’s administration, where the SEC has been retreating from several crypto-related investigations and lawsuits.
Settlement Negotiations and Court Rulings
In March, Ripple Labs revealed that the SEC had agreed to reduce its penalty from $125 million to $50 million, with the remaining $75 million to be returned to Ripple after being held in escrow. Ripple’s Chief Legal Officer Stuart Alderoty confirmed the agreement on social media and noted that Ripple would drop its cross-appeal following the SEC’s decision.
“The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” posted Alderoty on X.
Despite these negotiations, procedural errors led a federal judge to reject the proposed settlement in May, citing that the parties had bypassed rules governing relief from final judgments. Judge Analisa Torres’ decision to uphold the full $125 million penalty underscored the complexity of resolving the case.
Challenges and Criticisms
SEC Commissioner Criticizes Settlement
SEC Commissioner Caroline Crenshaw publicly criticized the proposed settlement, arguing that it undermined both the court’s authority and the SEC’s enforcement actions. Crenshaw expressed concern that the agreement was not in the best interest of investors and the markets.
“This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws,” Crenshaw stated.
Judge’s Rejection of Settlement
Following Crenshaw’s criticism, Judge Torres rejected the joint settlement bid, citing a compelling case built by the SEC over four years. The judge’s decision to maintain the original penalty and injunction has forced both parties to reconsider their legal strategies.
“With this, the ball is back in our court,” posted Alderoty. “The Court gave us two options: dismiss our appeal challenging the finding on historic institutional sales—or press forward with the appeal. Stay tuned. Either way, XRP’s legal status as not a security remains unchanged.”
Looking Ahead: The Future of Ripple and XRP
In the latest development, Ripple has decided to drop its cross-appeal, with the SEC expected to follow suit by withdrawing its appeal to the 2023 ruling. This move could finally bring the long-running legal battle to a close, allowing Ripple to focus on its vision of building the “internet of value.”
“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said,” Garlinghouse wrote on X. “We’re closing this chapter once and for all, and focusing on what’s most important—building the internet of value. Lock in.”
If the court filings proceed as planned, the case could reach a conclusion, providing much-needed clarity for Ripple and the broader cryptocurrency market. The resolution of this high-profile case will likely have significant implications for the regulatory landscape and the future of digital assets in the United States.
