In a surprising regulatory twist, the U.S. Securities and Exchange Commission (SEC) has granted Ripple a waiver that allows the firm to sell securities to private investors—a decision that appears to contradict prior court rulings in the XRP litigation. This unexpected development has reignited debates over the SEC’s approach to crypto oversight and its relationship with the judiciary.
Ripple’s Legal Battle: A Brief Recap
Since 2020, Ripple has been embroiled in a high-profile legal dispute with the SEC, centered on whether its XRP token constitutes a security. Earlier this year, the main case was officially closed, with Judge Torres ruling against retail sales of XRP as securities. Ripple’s efforts to reverse this restriction through conventional legal channels were unsuccessful—until the SEC intervened with a direct waiver last week.
The Waiver’s Language and Implications
According to official documentation, the SEC justified its decision by citing “good cause” and issued an exemption specifically for Ripple’s private offerings. While this does not erase previous penalties or legal findings, it clears Ripple’s biggest hurdle: the ban on selling securities to select investors. Former SEC official Marc Fagel called the move “unprecedented” and “lawless,” suggesting that the agency may have overstepped its authority by circumventing judicial precedent.
A Divisive Regulatory Precedent
Critics argue the waiver undermines legal process and sets a concerning precedent for crypto regulation. With no immediate mechanism to challenge the waiver unless investor harm occurs, the move places significant power in the hands of regulators—outside of court supervision. The lack of transparency and procedural oversight could raise questions about regulatory accountability.
Ripple’s Short-Term Win, Long-Term Risk
For Ripple, the waiver opens a new revenue stream and marks a tactical victory in its post-litigation recovery. XRP supporters are celebrating the breakthrough, but industry watchers warn that it may destabilize long-term regulatory norms. As the SEC faces increasing pressure for inconsistent crypto enforcement, this decision could further erode institutional trust.
A Watchpoint for the Industry
The Ripple waiver is more than a procedural footnote—it’s a litmus test for how far regulators can go in shaping crypto markets. Whether this turns into a catalyst for broader reforms or remains a controversial exception will depend on market reaction and potential legal challenges down the line. For now, investors and legal analysts alike are watching closely.