In a significant turn of events, Ripple Labs has announced that the U.S. Securities and Exchange Commission (SEC) has withdrawn its appeal in the ongoing legal dispute concerning the classification of the XRP token. This development marks a pivotal moment in the cryptocurrency industry’s regulatory landscape.
Background of the Legal Dispute
The SEC initiated a lawsuit against Ripple Labs in December 2020, alleging that the company’s sale of XRP tokens constituted an unregistered securities offering. This action sparked a broader debate about how cryptocurrencies should be classified and regulated.
In July 2023, U.S. District Judge Analisa Torres delivered a mixed ruling. She determined that Ripple’s sales of XRP on public exchanges did not qualify as securities transactions, providing a partial victory for Ripple.
However, the judge also concluded that approximately $728 million worth of XRP sales to institutional investors did meet the criteria for securities offerings, thereby requiring compliance with federal securities laws.
Consequently, Ripple was fined $125 million, though this penalty was put on hold pending the company’s appeal to the 2nd U.S. Circuit Court of Appeals.
SEC’s Withdrawal of the Appeal
On March 19, 2025, Ripple CEO Brad Garlinghouse announced on social media platform X that the SEC had decided to withdraw its appeal against the earlier court ruling.
He described this move as a “resounding victory” and a “long overdue surrender” by the regulatory body. Ripple’s Chief Legal Officer, Stuart Alderoty, echoed these sentiments, stating that Ripple is now “in the driver’s seat” and will assess the best course of action regarding their cross-appeal.
Implications for the Cryptocurrency Industry
The SEC’s decision to withdraw its appeal is seen as part of a broader shift in the agency’s approach to cryptocurrency regulation. Since President Donald Trump began his second term in January, the SEC has shown signs of retreating from its stringent oversight of the crypto markets.
Notably, the agency has dropped civil lawsuits against major crypto exchanges like Coinbase and Kraken. Additionally, there is speculation that the SEC may resolve its civil fraud case against Chinese entrepreneur Justin Sun, an adviser to a Trump-backed crypto project.
Furthermore, President Trump has nominated Paul Atkins, a Washington lawyer known for his supportive stance toward the crypto industry, to become the new SEC chair. Atkins is expected to replace Gary Gensler, who has been a controversial figure in the crypto community due to his rigorous regulatory approach.
Market Reaction and Future Outlook
The news of the SEC’s withdrawal has had a positive impact on the cryptocurrency market, particularly for XRP. Following the announcement, XRP’s market value experienced a notable increase, reflecting renewed investor confidence.
This development is also anticipated to influence other cryptocurrencies, as it may set a precedent for how regulatory bodies approach digital assets in the future.
Despite this victory, Ripple’s legal journey is not entirely over. The company’s appeal concerning the $125 million fine related to institutional sales is still pending. The outcome of this appeal will be closely watched, as it could further clarify the regulatory framework for cryptocurrency transactions involving institutional investors.
Final Words
Ripple’s recent triumph over the SEC’s withdrawn appeal signifies a monumental moment for the company and the broader cryptocurrency industry.
This event underscores the evolving relationship between regulatory bodies and digital asset firms, highlighting the need for clear and fair guidelines that foster innovation while protecting investors. As the legal proceedings continue, the industry awaits further developments that will shape the future of cryptocurrency regulation.
