In a landmark decision, the U.S. Securities and Exchange Commission (SEC) has officially withdrawn its appeal and dropped the lawsuit against Ripple Labs, according to Ripple CEO Brad Garlinghouse.
This move marks the end of a five-year legal battle that has significantly impacted the cryptocurrency industry and XRP.
The SEC vs. Ripple Case Finally Comes to an End
The SEC filed its lawsuit against Ripple in December 2020, accusing the company of conducting an unregistered securities offering worth $1.3 billion through XRP sales.
However, in July 2023, U.S. District Judge Analisa Torres ruled that XRP’s programmatic sales to retail investors did not constitute securities transactions, dealing a major blow to the SEC’s case. While the ruling upheld that XRP’s institutional sales violated securities laws, the SEC continued to pursue further legal actions against Ripple.
With the SEC withdrawing its appeal and dropping the lawsuit, Ripple has secured a major legal victory. This outcome could set an important precedent for the classification of digital assets in the U.S. and influence the SEC’s broader approach to cryptocurrency enforcement.
“This is the moment we’ve been waiting for. The SEC has dropped its appeal – a resounding victory for Ripple, for crypto, in every way,” Garlinghouse wrote on X (formerly Twitter).
The SEC had until April 16 to decide on its appeal, but this latest move suggests the agency is stepping back from aggressive crypto enforcement.
Notably, the decision was not entirely unexpected, as the SEC has recently dropped multiple lawsuits against other crypto firms, including Coinbase, Kraken, Robinhood, MetaMask, OpenSea, Uniswap, and more.
Overall, the Ripple lawsuit was one of the most significant enforcement actions the SEC had taken against the crypto industry. This case positioned the SEC and Chairman Gary Gensler as leading skeptics of the industry.
“In many ways, this lawsuit was the first shot fired in the war against crypto. Today marks the SEC’s long-overdue surrender. The agency pursued a baseless lawsuit that wiped out $15 billion in value from innocent XRP holders. The SEC was the real market manipulator. We won on every critical legal point,” Garlinghouse stated.
XRP Surges Nearly 15%
The market reacted swiftly, with XRP’s price surging nearly 15% following the announcement. Industry leaders have welcomed the decision as a step toward clearer cryptocurrency regulations.
XRP’s daily trading volume has also jumped 80%, and the odds of an XRP ETF have increased. With the SEC’s withdrawal, XRP could potentially be classified as a commodity, similar to Bitcoin and Ethereum.
As the case concludes, attention now turns to how the SEC will handle future crypto oversight and whether this signals a shift in its regulatory stance.
