Since Christmas 2020, Ripple Labs, the issuer of the cryptocurrency XRP, has been involved in a legal battle with the US Securities and Exchange Commission (SEC). After years of fighting, the SEC is now waving the white flag and withdrawing its appeal.
In December 2020, the Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its two executives. The agency accused the company of selling unregistered securities to investors. For two and a half years, Ripple fought against the SEC's lawsuit, until a US court issued a preliminary ruling in July 2023. The XRP token itself was not considered a security, only the offering to institutional investors violated federal laws. The SEC dropped the lawsuit against Ripple executives Brad Garlinghouse and Chris Larsen but filed an appeal regarding the definition of XRP as a commodity. The agency has now withdrawn this step, as indicated by a post from Ripple Labs CEO Brad Garlinghouse on X.
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Ripple wins against SEC
In his post, Garlinghouse describes the end of the appeal process as an "overwhelming victory" and "long overdue capitulation" by the regulatory body. The decision is also a result of the shift in direction under President Trump’s administration. Under the new leadership, the SEC dropped all its lawsuits against crypto companies. This is intended to bring an end to the "Operation Choke Point 2.0" – a nickname for the unjustified crackdown on the crypto industry under Biden.
Additionally, the Ripple CEO has been actively involved in Washington politics for some time. He donated millions to Trump’s victory celebration and attended the "Crypto Summit" at the White House as a guest. As a result, XRP was named as one of the potential "US cryptocurrencies" for a strategic reserve.
How much does Ripple have to pay?
Ripple was only unable to disprove one accusation. In the 2023 ruling, Judge Torres decided that the XRP offering to institutional investors should be classified as an unregistered securities transaction. In August of last year, she imposed a fine of 125 million USD, but this was suspended after Ripple appealed the decision at the 2nd U.S. Circuit Court of Appeals in Manhattan. This appeal remains in place.
"Ripple now has the upper hand, and we will evaluate how best to continue pursuing our appeal. Regardless, today is a day to celebrate." - Stuart Alderoty, Head of Ripple's Legal Department
