The long-running legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has officially concluded. The parties have mutually agreed to withdraw their appeals, closing one of the crypto world's most controversial cases. According to a joint waiver filed with the U.S. Court of Appeals for the Second Circuit, each side will bear its own litigation costs and attorney fees.
With this development, the July 2023 decision by Judge Analisa Torres in New York federal court will become final. According to the ruling, Ripple's sale of hundreds of millions of dollars in XRP to institutional investors was considered an "unregistered security sale," while retail transactions conducted through exchanges where the investor's identity is unknown were not considered securities.
It's time for Ripple to "get back to work"
Ripple CEO Brad Garlinghouse announced in June that they would drop the appeal, saying, "We are closing this chapter completely; we are now focusing on what matters most: building the Internet of Value." Ripple's Chief Legal Officer, Stuart Alderoty, posted on social media on August 7th, saying, "Following the Commission's vote today, the SEC and Ripple have officially withdrawn their appeals. The end... and it's time to get back to work."
In December 2020, the SEC filed a lawsuit against Ripple Labs and its senior executives, Brad Garlinghouse and Chris Larsen, characterizing the company's XRP sales as an "unregistered securities offering." The litigation centered on cross-appeals, millions of dollars in legal fees, and the debate over whether crypto assets are securities or commodities.
Much of the case unfolded under the shadow of the Biden administration's harsh regulatory measures against crypto and then-SEC Chairman Gary Gensler's policy of "regulation by enforcement." A partial ruling in 2023 proved a turning point. The court ruled that the version of XRP sold on exchanges was not a security, while the institutional sales were unregistered. Accordingly, Ripple was ordered to pay a $125 million fine to the SEC. This figure fell well short of the $2 billion requested by the regulator.
Following the ruling, the price of XRP surged. Trading at around $3.04 before the news, it quickly gained more than 7 percent to $3.27. The price climbed by 13 percent during the day, reaching $3.37. This put the token at its highest level since July 23rd and 8 percent shy of its all-time high of $3.65, broken on July 18th.
This development officially closed the case, which had lasted nearly five years and was symbolic for the future of the crypto industry. Market participants believe the Ripple decision could set a precedent for the legal status of crypto assets in the future.
