Ripple and the United States Securities and Exchange Commission (SEC) have agreed to drop all appeals and end their five-year legal battle.
The agreement marks a pivotal moment for crypto regulation and signals the end of one of the industry’s most consequential court cases.
Ripple, SEC End Legal Battle
Ripple CEO Brad Garlinghouse announced the decision on Friday. It comes shortly after a New York judge blocked the company’s attempts to settle the case for $50 million. Garlinghouse added that the SEC is also expected to drop its appeal, ending the prolonged legal battle.
“Ripple is dropping our cross-appeal, and the SEC is expected to drop their appeal, as they’ve previously said. We’re closing this chapter once and for all and focusing on what’s most important – building the Internet of Value. Lock in.”
Judge Analisa Torres had denied a joint motion for an indicative ruling earlier in the week, the second time she dismissed the appeal.
According to Stuart Alderoty, Ripple’s chief legal officer, the court could either dismiss its appeal challenging the prior funding on the historic institutional sale of XRP or proceed with the appeal and litigation.
“With this, the ball is back in our court. The court gave us two options: dismiss our appeal challenging the finding on historic institutional sales—or press forward with the appeal. Stay tuned. Either way, XRP’s legal status as not a security remains unchanged. In the meantime, it’s business as usual.”
A History Of The Legal Battle
The SEC sued Ripple in 2020, alleging it conducted an unregistered securities offering by selling XRP tokens to investors. In 2023, Judge Torres ruled that while XRP is not a security, Ripple’s direct sales to institutional investors constituted an unregistered securities offering. The decision was lauded as a landmark split decision, securing a major win for the crypto industry in clarifying that the programmatic sales and secondary market trading of the XRP token did not fall under SEC jurisdiction. However, the judge imposed potential financial penalties for Ripple.
The SEC hinted it would appeal the ruling on XRP’s non-security status. However, it ultimately decided to drop the appeal. Ripple’s decision to drop the cross-appeal effectively ends the litigation on the institutional sales ruling. The outcome gives XRP legal clarity in the US and finalizes Ripple’s settlement exposure. However, the company is expected to pay a civil penalty related to the institutional sales of the XRP token.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
