In a significant development for the cryptocurrency industry, Ripple CEO Brad Garlinghouse announced that the U.S. Securities and Exchange Commission (SEC) is dropping its appeal in the long-running lawsuit against Ripple Labs. This decision marks a potential shift in the SEC’s approach to regulating digital assets and could reshape the landscape for Ripple and the broader crypto market.
Background of the Lawsuit
The SEC initiated legal action against Ripple in 2020, alleging that the company raised $1.3 billion by selling XRP as an unregistered security. The case dragged on for years, becoming a focal point in the debate over crypto regulation.
In 2023, Ripple achieved a partial victory when U.S. District Judge Analisa Torres ruled that XRP is not a security when sold to retail investors on public exchanges. However, institutional sales were classified as securities. The SEC appealed this ruling, prolonging uncertainty—until now.
A Shift in SEC Strategy
Recent moves by the SEC suggest a broader reconsideration of its crypto enforcement strategy. Over the past year, the agency has scaled back actions against major players in the industry. It dropped its case against Coinbase, ended investigations into Robinhood’s crypto division, Uniswap, Gemini, and Consensys without charges, and even clarified that meme coins do not qualify as securities.
Garlinghouse’s announcement aligns with this trend, hinting that the SEC may be moving away from its previously aggressive stance.
Speculation and Market Reaction
Speculation about the SEC abandoning the Ripple lawsuit had been circulating for weeks, driven by industry rumors and posts on platforms like X. While Garlinghouse’s statement provides the most concrete indication yet, official confirmation from the SEC remains pending.
Nonetheless, the news triggered an immediate response in the market, with XRP’s price surging as investors reacted with optimism.
Implications for Ripple and Crypto
If the SEC fully drops the lawsuit, it could be a game-changer for Ripple. The resolution may clear the path for greater institutional adoption of XRP and bolster Ripple’s position in the global payments sector.
Beyond Ripple, this development could signal a move toward clearer regulatory frameworks for cryptocurrencies in the U.S., potentially reducing uncertainty that has long plagued the industry.
Looking Ahead
While the announcement is a cause for celebration among Ripple supporters, caution is warranted. The SEC’s evolving approach—including upcoming roundtable discussions on digital asset classification—suggests that the regulatory environment remains fluid.
For now, the apparent end of the Ripple lawsuit stands as a milestone, with its full impact set to unfold in the months ahead.
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