What to Know
- The SEC has officially ended its lawsuit against Ripple, imposing a $125M fine but dropping all appeals.
- Regulators now plan to shift focus from enforcement to drafting clear crypto rules.
- The closure lifts a major legal cloud over XRP, boosting investor confidence.
The long-running court case between Ripple Labs and the U.S. SEC is now over. The SEC dropped its action against Ripple, which was welcomed by both the crypto industry and investors. The case had been going on for years and was known all over the world.
Commissioner Hester Peirce confirmed the closure last week, saying:
“Last week, the SEC’s case against Ripple was finally laid to rest. A welcome development for many reasons, including that minds once occupied with litigation now can concentrate on creating a clear regulatory framework for crypto.”
The SEC had originally sued Ripple in December 2020, alleging that the company raised $1.3 billion through unregistered sales of its cryptocurrency, XRP. A mixed court ruling in 2023 established that XRP sold to institutional investors fell under securities law, while those sold on exchanges did not. In August 2024, the judge fined the company $125 million. On Friday, both sides decided to drop their appeals, which meant that the fine and a ban on institutional XRP sales wouldn’t stand anymore.
A Quick Recap of the Case
The SEC said that Ripple’s sales of XRP were basically private offers of securities. This means that Ripple should have followed the same steps as a company that issues stocks or bonds. But Ripple fought back, saying that XRP is a digital currency and not a security, so the SEC doesn’t have control over it.
The case took many turns over the years, and the judges said that some sales of XRP, like those made on exchanges to regular people, were not securities deals. The lawsuit also became a rallying point for the wider crypto industry, which has long complained about what it sees as unclear and inconsistent regulations from the SEC. Many companies argued that the Ripple case was a sign of “regulation by enforcement,” where the SEC uses lawsuits instead of creating clear rules and warned that this approach could drive innovation outside the U.S.
SEC Shifts to Policy Work
With the case now closed, the SEC says it will turn its focus toward building a clearer set of rules for the crypto industry. Commissioner Paul Atkins shared his support for this shift today, posting on X:
“Commissioner Peirce is right. With this chapter closed, we now have an opportunity to shift our energy from the courtroom to the policy drafting table. Our focus should be on building a clear regulatory framework that fosters innovation while protecting investors.”
This signals a potential change in the SEC’s approach from high-profile lawsuits to drafting guidelines that help crypto companies understand how to operate within the law.
Market Reaction and Ripple’s Position
After the news came out, the price of XRP moved a lot. Experts say that XRP is getting close to a key support level at $3.16. Traders are closely watching to see if it will hold. When the lawsuit is over, it could lift a big cloud over the token, which could help investors’ trust in the long run.
Ripple recently also got a new license from the SEC that could help institutions use XRP more quickly. With this change and the end of the lawsuit, Ripple may be better able to grow its relationships and use cases around the world.
What’s Next
Even though Ripple didn’t get hit with the harsh penalties that some people were worried about, the whole crypto business will be keeping a close eye on how the SEC keeps its promises. Clear rules could help make the law less uncertain, bring in more institutional players, and free up inventors to focus on building instead of fighting the law.
People are seeing the end of the SEC v. Ripple case as a big deal for now. It’s good news for people who own XRP, and it could also be the start of a better relationship between U.S. officials and the crypto industry.
Also Read: Ripple Expands Stablecoin Strategy with $200M Rail Purchase
