In a significant development for the cryptocurrency industry, Ripple Labs announced on Wednesday that the U.S. Securities and Exchange Commission (SEC) has dropped its appeal in a long-standing legal battle over the classification of XRP, the digital asset developed by Ripple. This decision marks a major victory for Ripple and potentially sets a precedent for future crypto regulation.
The SEC had been appealing a July 2023 ruling by U.S. District Judge Analisa Torres, who determined that XRP, when sold on public exchanges, did not meet the legal definition of a security. However, Judge Torres also ruled that $728 million of XRP sales to institutional investors should have complied with securities laws, resulting in a $125 million fine for Ripple. Despite this partial victory for the SEC, Ripple’s CEO, Brad Garlinghouse, hailed the end of the appeal as a “resounding victory” and a “long overdue surrender” by the regulator.
Ripple Chief Legal Officer Stuart Alderoty noted that the company is now in a strong position to pursue its cross-appeal, emphasizing that this is a day to celebrate. The SEC has declined to comment on its decision to drop the appeal.
This move comes amidst a broader shift in the SEC’s stance on cryptocurrency oversight, particularly since U.S. President Donald Trump began his second term in January 2025. The SEC has recently ended civil lawsuits against major crypto exchanges like Coinbase and Kraken, signaling a possible softening of its regulatory approach.
Ripple Labs, founded in 2012, developed XRP as a digital asset primarily for facilitating fast and cost-effective cross-border payments. The SEC initially sued Ripple in December 2020, alleging that the company had conducted a $1.3 billion unregistered securities offering by selling XRP. Ripple argued that XRP is not a security but rather a utility token similar to Bitcoin or Ethereum, which the SEC had previously suggested were not securities.
The case has been closely watched as a test of how cryptocurrencies are regulated in the United States. Ripple’s victory could pave the way for clearer guidelines on what constitutes a security in the crypto space, potentially benefiting the broader cryptocurrency industry.
The SEC’s decision to drop its appeal also aligns with a pro-crypto shift under President Trump’s administration, which has seen the nomination of Paul Atkins, a lawyer supportive of the crypto industry, to become SEC chair.
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