In a landmark development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) has withdrawn its appeal against Ripple Labs, concluding a protracted legal battle that began in December 2020. The case centered on whether Ripple’s XRP token constituted an unregistered security. The SEC’s decision to drop the appeal marks a significant victory for Ripple and could have far-reaching implications for the regulation of digital assets in the United States.
The SEC filed a lawsuit against Ripple Labs and its executives, alleging that the company had raised over $1.3 billion through the sale of XRP tokens, which the SEC claimed were unregistered securities. Ripple contested the allegations, arguing that XRP should not be classified as a security.
In July 2023, U.S. District Judge Analisa Torres delivered a mixed ruling. She determined that Ripple’s programmatic sales of XRP on public exchanges did not constitute securities transactions. However, she also ruled that Ripple’s direct sales of $728 million worth of XRP to institutional investors did violate securities laws, resulting in a proposed $125 million fine.
On March 19, 2025, Ripple CEO Brad Garlinghouse announced that the SEC had decided to withdraw its appeal of Judge Torres’s ruling. Garlinghouse described the development as a “resounding victory” and a “long-overdue surrender” by the regulator. Ripple’s Chief Legal Officer, Stuart Alderoty, echoed this sentiment, stating that the company would evaluate how best to proceed with its cross-appeal.
The SEC’s decision to drop the appeal is seen as part of a broader shift in the agency’s approach to cryptocurrency regulation. Since President Donald Trump’s return to office in January 2025, the SEC has retreated from several high-profile crypto enforcement actions, including lawsuits against exchanges like Coinbase and Kraken.
Following the SEC’s withdrawal, Ripple and the SEC reached a tentative settlement agreement. Under the terms of the settlement, Ripple agreed to pay a reduced fine of $50 million, down from the originally proposed $125 million. The settlement is pending approval from the SEC and the presiding judge.
As part of the settlement, Ripple has agreed to drop its cross-appeal, and the SEC will request the court to lift the standard injunction imposed against Ripple. This move effectively concludes one of the most significant legal battles in the crypto industry.
The news of the SEC’s withdrawal and the subsequent settlement had an immediate positive impact on XRP’s market performance. The token’s price surged by over 10%, reaching approximately $2.55, reflecting investor optimism about Ripple’s legal clarity and the potential for broader adoption of XRP.
The resolution of the Ripple case is expected to influence the SEC’s approach to other ongoing crypto-related cases and could lead to a more defined regulatory framework for digital assets. Industry stakeholders are hopeful that this development will pave the way for clearer guidelines and increased innovation within the U.S. crypto market.
The SEC’s decision to withdraw its appeal in the Ripple case marks a pivotal moment in the regulation of cryptocurrencies in the United States. While the legal battle resulted in a partial victory for both parties, the outcome provides much-needed clarity for Ripple and sets a precedent for how digital assets may be treated under U.S. securities laws. As the industry continues to evolve, stakeholders will be closely monitoring how this case influences future regulatory actions and the broader adoption of blockchain technologies.