February 16, 2025
Ripple-SEC case

The protracted legal battle between the crypto solutions company Ripple Labs Inc. and the United States Securities and Exchange Commission (U.S. SEC) has finally concluded, with a decisive victory for Ripple. The positive development comes some months after the U.S. securities agency dropped all charges against Ripple Labs executives Brad Garlinghouse and Chris Larsen. 

The Ripple-SEC lawsuit, which revolved around the classification of XRP as a security, ended with the court imposing a fine on Ripple. The imposed fine was significantly lower than the SEC’s initial demand, marking a huge win for the cross-border payment firm. 

Initiated in December 2020, the final judgment in the Ripple-SEC lawsuit came on August 7, 2024, per an update from Ripple’s CEO Brad Garlinghouse. According to the Wednesday announcement, the court concluded the case by imposing a $125 million fine on Ripple

“The SEC asked for $2B, and the Court reduced their demand by ~94% recognizing that they had overplayed their hand,” Ripple CEO Brad Garlinghouse said. “We respect the Court’s decision and have clarity to continue growing our company,” he added. 

According to Garlinghouse, the conclusion of the case marks a victory for Ripple, the crypto industry and the rule of law. “The SEC’s headwinds against the whole of the XRP community are gone,” he concluded. 

Ripple’s chief legal officer, Stuart Alderoty, also expressed excitement over the final judgment in the multi-year legal tussle. “The Court rejects the SEC’s suggestion that Ripple acted recklessly and she reminds the SEC that this case did not involve any allegations of fraud or intentional wrongdoing, and no one suffered any financial harm,” he wrote.

On the fine settlement, Alderoty noted that Ripple would comply accordingly. “We respect the $125M fine the Court has imposed for certain historic sales to sophisticated third parties,” he added. 

Ripple-SEC Lawsuit Summary Judgment

Recall that the presiding judge in the case, Analisa Torres, had earlier given the summary judgment in July 2023, stating that the XRP Ledger native token, XRP, is not a security as claimed by the SEC. Judge Torres added that secondary market sales of XRP do not constitute the sale of securities.

However, the landmark ruling communicated that Ripple violated U.S. securities laws when it conducted sales of XRP to institutional investors, worth about $1.3 billion. The Gary Gensler-led SEC, therefore, demanded a $2 billion penalty from the firm on the back of this court ruling in July 2023.

Read also: Korea VASP License Holder Infinite Block  Becomes XRP Ledger (XRPL) Validator 

The Road Ahead for XRP

With the lawsuit concluded in favour of Ripple, more institutions and businesses are likely to adopt XRP as a payment method and investment option without the uncertainty of regulatory overhang. 

As earlier reported, Bitcoin exchange-traded fund (ETF) issuer Valkyrie hinted at XRP ETFs in a recent statement, implying that it is inevitable. Likewise, Grayscale Digital Large Cap Fund rebalanced its holdings to include XRP

Ripple has also expanded its payment network, which utilizes XRP for settlement, to over 80 payout markets. 

Related: Ripple Stablecoin to Launch on XRP Ledger and Ethereum in 2024

On the whole, investor confidence in XRP is bound to increase amid the lawsuit resolution, leading to a potential price rally in the coming months. Notably, XRP has been experiencing a positive price reaction since Wednesday. The 6th largest cryptocurrency by market cap is up over 24% in the past 24 hours. 

Trading at $0.62 at the time of writing, XRP price has gained over 43% in the past 30 days. With investors increasingly accumulating the crypto asset and its trading volume hitting $6 billion on August 8, XRP is on track to challenge the key resistance at $0.65. Whether this level will be surpassed in the short term remains to be seen. 

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