The SEC (U.S. Securities and Exchange Commission) decided to withdraw its appeal against Ripple in the case related to the sale of XRP. Stuart Alderoty, Ripple's legal chief, explained the details of this decision. Below, I summarize the information based on reliable sources:
### Case background
The SEC sued Ripple Labs in December 2020, alleging that the company had made an unregistered securities offering by selling XRP. In July 2023, Judge Analisa Torres issued a mixed ruling: she determined that programmatic sales of XRP (through exchanges) did not constitute securities, but institutional sales did violate securities laws. In August 2024, the court imposed a $125 million fine on Ripple for the institutional sales, much lower than the $2 billion requested by the SEC. Both parties appealed: the SEC appealed the ruling on programmatic sales, and Ripple filed a cross-appeal regarding the fine and institutional sales.
### Withdrawal of the appeal
On March 19, 2025, Ripple announced that the SEC decided to abandon its appeal unconditionally, which was confirmed by Ripple CEO Brad Garlinghouse and Stuart Alderoty. Subsequently, on March 25, Alderoty reported that Ripple also agreed to withdraw its cross-appeal, ending more than four years of litigation. As part of the agreement, the SEC will retain $50 million of the original $125 million fine (which was already in an escrow account), and the remaining $75 million will be returned to Ripple. Additionally, the SEC will seek to lift the previously imposed standard injunction, which restricted certain sales of XRP. This agreement is subject to final court approval and a vote by the Commission.
### Explanation by Stuart Alderoty
Alderoty described this resolution as a significant victory for Ripple and the crypto industry in general, stating that the case sets an important legal precedent. According to him, the SEC's decision to withdraw the appeal reflects a shift in regulatory approach, especially under the new administration of Donald Trump, who took office in January 2025. Alderoty had previously expressed (in January 2025) his optimism about the possibility that the next SEC chair, Paul Atkins, would withdraw enforcement cases against crypto companies that did not involve fraud, like Ripple, which primarily focused on registration issues.
Alderoty also highlighted that Judge Torres' ruling, which states that XRP is not a security in itself in programmatic sales, was not challenged by the SEC in its appeal and remains "the law of the land." This provides regulatory clarity for Ripple and strengthens its position in the market. He also noted that the SEC's case was "noise" and a "shame" for the agency, as no fraud was alleged nor were losses demonstrated for investors.
### Reasons behind the SEC's decision
Although the SEC has not issued an official statement detailing why it withdrew the appeal, several sources suggest that the change in SEC administration and the policy of the new Trump administration played a key role. Following Gary Gensler's departure as SEC chair on January 20, 2025, and with Mark Uyeda as interim chair, the agency began to withdraw enforcement cases against crypto companies, possibly in response to a more favorable political environment for cryptocurrency innovation. The nomination of Paul Atkins, known for a more friendly stance towards cryptocurrencies, may also have influenced this.
Additionally, Ripple and its executives, including Alderoty, have strengthened their relationship with the Trump administration, attending inauguration events and contributing $5 million in XRP to Trump's inaugural fund, as well as $45 million to the pro-crypto PAC Fairshake. Although Alderoty stated that the SEC's decision was "independent" of these contributions, the political context suggests a shift towards a more permissive regulatory approach.
### Implications
- **For Ripple**: The resolution allows Ripple to move forward without legal uncertainty, with only a $50 million fine (instead of the initial $125 million) and the lifting of restrictions on future institutional sales, if the request to lift the injunction is approved. This strengthens its position in the market and its expansion in the U.S.
- **For the crypto industry**: Although the 2023 ruling does not set a binding legal precedent, it reinforces the idea that tokens like XRP are not necessarily securities in secondary sales, which could influence future cases. However, definitive regulatory clarity depends on new legislation, such as a framework for crypto assets, which is still under discussion in Congress.
### Conclusion
The SEC withdrew its appeal against Ripple due to a change in the political and regulatory environment following the arrival of the Trump administration and the departure of Gary Gensler, along with pressure from a case that many considered weak. Stuart Alderoty explained that this outcome is a victory for Ripple, reaffirms that XRP is not a security in programmatic sales, and allows the company to focus on its growth. The final resolution, which includes the withdrawal of Ripple's cross-appeal and the adjustment of the fine, marks the end of a landmark case for crypto regulation in the U.S.