Ripple has chosen to forego further appeals to the Securities and Exchange Commission.
The U.S. Securities and Exchange Commission (SEC) and Ripple, the blockchain-based payments company, have reached a significant milestone in their long-running legal battle. As of March 25, 2025, the SEC has dropped its appeal without any conditions, and Ripple has chosen to withdraw its counter-appeal.
The initial lawsuit was filed by the SEC in December 2020, accusing Ripple of selling unregistered securities worth $1.3 billion in the form of XRP. The defendants included Ripple's CEO Brad Garlinghouse and co-founder Chris Larsen. In July 2023, Judge Analisa Torres of the Southern District of New York ruled that the software sales and other distributions of XRP were not offers or sales of investment contracts. However, the court found that the sale of tokens to institutional investors violated securities laws.
The SEC's appeal was rejected due to lack of sufficient evidence and because it would not significantly advance the final resolution of the case. Consequently, the SEC withdrew its lawsuit against Garlinghouse and Larsen, and the parties reached a settlement, dismissing further charges.
In August 2024, Judge Torres issued a final decision, fining Ripple $125 million - considerably less than the SEC's initial demand of $2 billion. The SEC, however, appealed this verdict. The agency later took steps to reconsider previously accepted judicial decisions regarding the sales and offers of XRP on digital platforms, Garlinghouse and Larsen's involvement, and the distribution of tokens "in exchange for non-monetary consideration".
Stuart Alderoty, Ripple's chief lawyer, explained that the SEC would retain $50 million of the $125 million fine (already deposited in an interest-bearing account), and the remaining amount would be returned to Ripple. The agency also requested the court to vacate the standard injunction that was previously imposed at its request. According to Alderoty, further actions in the case will depend on "the commission's vote, the drafting of final documents, and routine judicial procedures".
It is worth noting that the SEC preliminarily agreed to withdraw its lawsuit against ConsenSys and drop its claims against the crypto arm of online broker Robinhood. The SEC also ceased its investigation into Uniswap Labs. The resolution of this legal battle has implications for regulating crypto assets, financial impact, market reaction, and procedural developments. The settlement could potentially provide some clarity on the SEC's view on crypto assets like XRP, stabilize XRP prices, and improve investor confidence in Ripple's operations.
In light of the SEC's withdrawal of its appeal against Ripple, the business landscape for XRP and related digital assets may undergo significant changes, potentially offering clarification on the SEC's stance towards crypto assets, and fostering increased investor confidence in Ripple's financial dealings. Moreover, the resolution of this legal dispute could have substantial implications for the regulatory framework governing digital assets and the broader crypto industry.
