SEC to Drop Appeal of Ripple Ruling, Ending 4-Year Legal Fight, CEO Says
XRP experienced a notable surge of 10% during the U.S. morning hours on Wednesday, following an announcement from Ripple CEO Brad Garlinghouse indicating the U.S. Securities and Exchange Commission (SEC) might withdraw its appeal against Ripple. “This is it – the moment we’ve been waiting for. The SEC will drop its appeal,” Garlinghouse stated via a post on X. He characterized the potential withdrawal as “a resounding victory for Ripple, for crypto,” reflecting the optimism surrounding this development in the cryptocurrency community.
Speculation around the resolution of the ongoing legal struggle between Ripple and the SEC had been intensifying in recent weeks. The SEC’s legal action dates back to 2020 when it accused Ripple of raising $1.3 billion through unregistered sales of XRP tokens, a claim Ripple has vehemently contested. In a ruling delivered by U.S. Judge Analisa Torres in 2023, it was determined that while Ripple had breached federal securities laws regarding institutional sales, its programmatic sales of XRP to retail exchanges did not constitute a violation. This outcome was viewed as a partial triumph for Ripple, despite the court imposing a $125 million fine against the company in August of that year.
The lawsuit’s impact has been considerable; Ripple’s legal fight with the SEC has resulted in approximately $15 billion in losses for XRP holders as market confidence was shaken. Garlinghouse has described the lawsuit as “the first major shot fired in the war on crypto,” reflecting its significance in broader regulatory actions against the cryptocurrency sector.
In recent shifts, the SEC has seen changes in leadership, including the departure of former Chair Gary Gensler, which has led to an easing of its aggressive enforcement posture. The agency has since dropped other investigations, including one targeting Coinbase. While former President Trump has nominated Paul Atkins to take over as the next SEC Chair, the Senate has yet to schedule a confirmation hearing, leaving the Commission’s future direction uncertain.
In a strategic move, Ripple and its executives heavily invested in the political landscape during the 2024 election cycle, contributing over $70 million to the Fairshake super PAC oriented towards Congress and more than $5 million to Trump’s inaugural fund, as reported by recent media coverage. This infusion of political capital hints at Ripple’s intentions to leverage political connections in favor of regulatory clarity and acceptability.
The potential resolution of the lawsuit also raises hopes for the approval of an XRP exchange-traded fund (ETF). Several firms, including Grayscale and Bitwise, have filed applications for such funds, and experts from Bloomberg have estimated a 65-75% likelihood of approval before the end of the year. Notably, XRP is among the digital assets that Trump identified as being crucial to a strategic U.S. crypto reserve, adding another layer of complexity to its national policy implications.
