In what appears to be a landmark victory for the cryptocurrency industry, Ripple Labs CEO Brad Garlinghouse announced Wednesday that the Securities and Exchange Commission (SEC) plans to drop its appeal in its prolonged legal battle against the company. The price of XRP, Ripple’s associated cryptocurrency, jumped as much as 14% to $2.55 following the news.
"I’m finally able to announce that this case has ended. It’s over," Garlinghouse stated in a video shared on X (formerly Twitter). "Today is a victory and [a] long overdue surrender from the SEC."
The development marks a potential conclusion to a contentious legal struggle that has stretched over four years. Ripple Labs, which utilizes XRP Ledger and the XRP cryptocurrency for its payment solutions, had previously secured a partial victory in 2023 when a federal New York judge ruled that the company’s "programmatic sales" of XRP on secondary markets did not constitute securities transactions. However, the judge determined that sales made to institutional investors did qualify as securities.
Following this mixed ruling, the SEC filed an appeal seeking to overturn the favorable aspects of the decision for Ripple. The federal court later ordered Ripple to pay a $125 million fine for its institutional XRP sales in August—significantly less than the $2 billion penalty the regulatory agency had requested.
According to a Ripple spokesperson who confirmed the development, the SEC’s decision remains "subject to Commission vote and approval." The complete withdrawal of the case could take "several weeks" to become official, with the spokesperson adding that "that timeline is completely in the SEC’s control." When contacted by reporters, the SEC declined to comment on the matter.
The SEC’s apparent retreat from the Ripple case aligns with a broader shift in the agency’s approach to cryptocurrency enforcement since Mark Uyeda took over as Acting Chair. Under his leadership, the regulator has withdrawn from several high-profile actions against crypto entities, including cases against exchanges Coinbase and Kraken.
Had the SEC prevailed in its appeal against Ripple, the outcome could have dramatically reshaped the regulatory landscape for cryptocurrencies, potentially affecting how digital assets are classified as securities versus commodities.
Before the recent U.S. presidential election that returned Donald Trump to office, Stuart Alderoty, Ripple Labs’ Chief Legal Officer, predicted that the SEC’s appeal would "backfire." While confident that the Second Circuit Court of Appeals would rule in the company’s favor, he also acknowledged that the SEC could withdraw its appeal at any point—a prediction that now appears to be materializing.
The resolution of this case may provide some regulatory clarity for the broader cryptocurrency industry, which has long operated under uncertain legal frameworks in the United States.
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