Ripple Labs will withdraw its cross-appeal against the U.S. Securities and Exchange Commission (SEC) in the high-profile legal dispute over the sale of its XRP tokens, Ripple CEO Brad Garlinghouse announced Friday. The decision marks a potential end to a lawsuit that has clouded the cryptocurrency industry for years and tested the SEC’s approach to digital assets.
“We’re closing this chapter once and for all,” Garlinghouse declared in a post on social media platform X. The CEO’s statement indicated that the SEC is also expected to withdraw its own appeal, paving the way for a possible resolution.
The move follows a protracted legal battle that began when the SEC sued Ripple in 2020, alleging the company had violated U.S. securities laws by selling XRP as an unregistered security. The case quickly became a lightning rod for the crypto industry, with XRP’s classification seen as a bellwether for how regulators might treat other tokens.
Judge’s Mixed Ruling in 2023
The turning point in the case came last year, when a federal judge ruled that Ripple’s sale of XRP on public exchanges did not constitute the illegal offering of securities, delivering a partial victory for Ripple. However, the judge found that Ripple’s $728 million worth of XRP sales to institutional investors did violate securities regulations.
Both Ripple and the SEC initially appealed aspects of the mixed ruling, setting up what many expected to be a prolonged appeals process. Ripple challenged the finding on institutional sales, while the SEC sought to reverse the decision on public exchanges.
Settlement Talks Stalled Over Fine Reduction
Earlier this year, the two sides appeared close to a settlement. They jointly asked the judge to set aside her previous injunction and approve a proposal to reduce Ripple’s fine from $125 million. This deal would have allowed both parties to walk away without pursuing further litigation.
But on Thursday, the judge rejected the joint request, throwing the settlement effort into uncertainty. Following the judge’s decision, Ripple’s announcement on Friday suggests both sides are ready to drop their appeals regardless of the setback.
Ripple’s willingness to end its appeal signals that the company may be prepared to accept the court’s finding on its institutional sales, a stance that could provide regulatory clarity for future token offerings but may also leave Ripple facing significant financial penalties.
Industry Watching for Ripple Effects
The Ripple-SEC case has been widely followed across the cryptocurrency world as a potential precedent-setter. XRP, which once ranked as the third-largest cryptocurrency by market capitalisation, saw its price and market position suffer in the wake of the SEC’s lawsuit. Exchanges delisted XRP, and investors faced uncertainty over its legal status.
A final resolution could stabilise XRP’s standing in the market and give guidance to other crypto projects seeking to avoid similar legal challenges. It could also reshape how companies structure token sales to institutional and retail investors in the U.S., especially regarding disclosures and registration requirements.
SEC Remains Silent as Ripple Moves Forward
The SEC declined to comment on Ripple’s announcement, according to Reuters. The agency has continued to pursue enforcement actions against other crypto companies, including recent lawsuits targeting major exchanges for alleged violations of securities laws.
For Ripple, the decision to end the appeals marks a significant strategic pivot. In his post, Garlinghouse framed the move as an opportunity to put years of uncertainty behind the company and its community. “It’s time to turn the page,” he wrote, emphasising Ripple’s focus on future growth rather than continued courtroom battles.
A Pivotal Moment for Crypto Regulation
Ripple’s decision to withdraw its cross-appeal and the expectation that the SEC will do the same represent a pivotal moment not only for the company but also for the evolving regulatory landscape of the cryptocurrency industry. While the judge’s refusal to lower the fine leaves some financial questions unanswered, both sides appear ready to conclude one of the most consequential crypto lawsuits to date.
As the dust settles, industry leaders and investors will watch closely to see how this case shapes the SEC’s future enforcement strategy and the legal status of digital assets across the U.S.
