Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have agreed to mutually abandon their appeals, effectively bringing to a close the nearly five-year legal battle over the classification and sale of Ripple’s XRP tokens. Ripple CEO Brad Garlinghouse announced the development on June 27, emphasizing that the company is “closing this chapter once and for all” and will now concentrate on advancing its core mission of building the “Internet of Value.” The SEC is also expected to drop its pending appeal, marking a pivotal moment for regulatory clarity in the cryptocurrency sector.
The dispute originated in December 2020 when the SEC sued Ripple, alleging that the company conducted unregistered securities offerings through institutional sales of XRP. In a landmark 2023 ruling, the court found that XRP sales on public exchanges did not constitute securities transactions, but that Ripple’s direct sales to institutional investors did violate securities laws. Both parties had appealed aspects of the judgment, prolonging the litigation.
Recently, a joint settlement proposal to reduce Ripple’s penalty from $125 million to $50 million and remove a permanent injunction was rejected by the presiding judge, who expressed concerns about lifting the injunction. Consequently, Ripple has agreed to accept the original $125 million civil penalty while the injunction likely remains in place. This resolution ends the uncertainty surrounding XRP’s regulatory status in the U.S. and allows Ripple to refocus on expanding its payment network and blockchain ecosystem.
The conclusion of this high-profile case is seen as a significant development for the crypto industry, as it clarifies regulatory boundaries and may pave the way for future XRP-based financial products, including potential ETFs. Despite some internal dissent within the SEC regarding the settlement terms, the agency’s decision to cease enforcement actions against Ripple aligns with recent trends toward a more measured regulatory approach to digital assets.
In summary, Ripple and the SEC’s decision to drop their appeals ends a protracted legal saga, enabling Ripple to move forward with its vision of creating a global, blockchain-powered financial infrastructure.
