On August 7, 2025, the U.S. Securities and Exchange Commission announced an official close to its years-long legal dispute against Ripple Labs. The SEC and Ripple formally ended the case by filing a joint stipulation to dismiss their respective appeals in the Second Circuit.
The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.
A Quiet but Definitive Conclusion
The dismissal ends the SEC’s appeal of the district court’s 2023 partial summary judgment—which found that XRP was not a security when sold to the public on exchanges—and Ripple’s cross-appeal challenging the court’s conclusion that its institutional sales violated the Securities Act. Under the agreement, each side will bear its own legal fees and costs. No further litigation is expected.
From Blockbuster Lawsuit to Settlement
The SEC first sued Ripple in December 2020, alleging the company conducted an unregistered securities offering by selling over $1.3 billion worth of XRP. The case quickly became a focal point for industry, with far-reaching implications for how tokens would be treated under U.S. law.
In July 2023, Judge Analisa Torres issued a landmark ruling: programmatic sales of XRP to retail buyers on digital exchanges did not constitute securities transactions. She found that such buyers lacked the necessary expectation of profits from Ripple’s managerial efforts—an essential prong of the Howey test. However, the court also held that Ripple’s direct sales to institutional investors were unregistered securities offerings. Ripple was later fined $125 million in connection with those sales.
While the decision was technically a split outcome, it was widely viewed as a win for Ripple and the broader crypto industry. It was also the first major case to draw a legal distinction between secondary market token sales and direct offerings, a line that the SEC had previously refused to acknowledge.
A Strategic Retreat by Both Sides
Rather than continue appellate litigation, both Ripple and the SEC chose to walk away. The joint dismissal reflects a mutual recognition that the time—and risk—of further proceedings wasn’t worth the potential upside.
In June, Ripple had already signaled its intent to withdraw its cross-appeal after reaching agreement with the SEC on final remedies. That settlement included restrictions on future institutional sales and compliance measures, in addition to the monetary penalty.
The final step came this week, with both parties requesting dismissal of all outstanding appellate claims. With the case finally closed, both sides can claim partial victories while avoiding the uncertainty of a drawn-out appellate fight.
Implications for the Crypto Industry
Although the case did not produce Supreme Court precedent or final appellate rulings, the litigation—and especially Judge Torres’s opinion—will likely shape how courts and regulators approach token classification going forward. It confirmed that not all crypto transactions fall under the securities umbrella, particularly in secondary markets where buyers are often anonymous and unaware of the issuer’s identity, let alone managerial promises.
The case also underscored the strategic limitations of regulation by enforcement. For all the SEC’s efforts to define the crypto industry through litigation, it now faces a growing patchwork of rulings that complicate its jurisdictional claims. Meanwhile, Congress continues to weigh legislation that could bring more clarity to the treatment of digital assets.
What Comes Next
With the Ripple case now officially closed, the company is free to move forward—both in the U.S. and abroad—without the overhang of federal securities litigation. The crypto industry, in turn, can look to this outcome as a cautiously optimistic signal: that nuance matters, that courts may be more receptive to technological complexity than regulators have been, and that litigation, while costly, can yield meaningful boundaries in an otherwise uncertain landscape.
