What Happened?

The U.S. Securities and Exchange Commission (SEC) has withdrawn its appeal against Ripple Labs, marking the end of a four-year legal dispute, which is considered a major victory for Ripple and the cryptocurrency industry.

This move has been regarded by cryptocurrency lawyers and others as a “confirmation that the XRP token is a digital commodity rather than a security.” This decision holds significant implications for the future development of XRP and the regulatory classification of other cryptocurrencies.

Although the appeal was withdrawn, Ripple still faces a $125 million judgment and an injunction preventing it from selling XRP to institutional investors. These issues remain unresolved and will influence Ripple’s future development strategies.

SEC Withdraws Appeal Against Ripple

After years of legal battles, the U.S. Securities and Exchange Commission (SEC) has finally withdrawn its appeal against Ripple Labs. This decision undoubtedly sent shockwaves through the cryptocurrency industry.

In 2020, the SEC filed a lawsuit against Ripple Labs, accusing the company of conducting an unregistered securities offering worth $1.3 billion through the sale of its native token, XRP. In other words, the SEC considered XRP to be a security, meaning Ripple’s sales actions violated relevant securities regulations.

This news quickly ignited investor enthusiasm, causing the price of Ripple’s XRP to soar by 10%, reaching a peak of $2.57. According to Coinmarketcap, as of the time of this writing, the price of XRP was $2.48.

The lawsuit lasted for four years, impacting Ripple’s operations and sparking widespread concern throughout the cryptocurrency industry regarding regulatory definitions. Ripple maintained that XRP is a digital commodity, not a security, and actively defended itself in court.

Ripple’s Future Development

On March 19, 2025, Ripple CEO Brad Garlinghouse publicly stated that the SEC would withdraw its appeal against Ripple, thus ending the four-year legal dispute.

This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.
The future is bright. Let’s build.
— Brad Garlinghouse (@bgarlinghouse), March 19, 2025

Cryptocurrency lawyer John Deaton commented that the SEC’s withdrawal of its appeal is the “final exclamation point” confirming that XRP is viewed as a digital commodity rather than a security. He considered this decision to be a major victory for the entire cryptocurrency industry.

I’m in NYC today and spoke briefly with @bgarlinghouse, who, understandably, is in a very good mood.
People need to remember, the company @Ripple wasn’t the only one sued, @bgarlinghouse & @chrislarsensf were sued individually, which is not usually done in a NON-FRAUD CASE.… Link — John E Deaton (@JohnEDeaton1), March 19, 2025

However, despite the withdrawal of the SEC’s appeal, Ripple still faces a $125 million judgment due to past improper sales of XRP. Nonetheless, Deaton believes that since the SEC withdrew the appeal, Ripple may now have more leverage in negotiating the amount of the judgment with the SEC.

Additionally, Ripple filed a counterclaim in October 2024. Deaton believes the SEC does not want Ripple to continue with its counterclaim, as a favorable ruling for Ripple could damage the SEC’s jurisdiction and impact its position in other cases. This gives Ripple an additional advantage in future settlement negotiations.

Another ongoing issue is the injunction issued by Judge Analisa Torres, which prevents Ripple from selling XRP to institutional investors to avoid violating securities laws. Deaton pointed out that if Ripple intends to directly issue XRP to U.S. banks in the future, how this injunction is lifted will be crucial.

Ripple CEO Garlinghouse stated that the SEC’s withdrawal of the lawsuit is “a victory for the industry and the beginning of a new chapter.” He mentioned that under former President Joe Biden’s leadership, the SEC took a tough enforcement stance against cryptocurrency companies, whereas the current President Donald Trump has a friendlier attitude towards the emerging industry and promised to make the U.S. the “cryptocurrency capital of the world.” Additionally, Trump appointed industry-friendly leaders to important regulatory positions, bringing new hope to the cryptocurrency industry.

Deaton reflected on the lawsuit, stating that he believed it was initially an “attack” on the entire cryptocurrency industry, but he believes this was not targeted solely at Ripple. Rather, it was a warning from traditional financial systems and regulators to the industry. He emphasized that Ripple never left the U.S. despite the lawsuit by the U.S. government, which has been beneficial for the company.

Although Ripple still faces some legal issues, the shift to a more favorable policy environment and regulatory attitude could pave the way for a clearer and more stable future for the cryptocurrency industry. Ripple’s case also serves as a reminder to industry players of the importance of communication and cooperation with regulators. Only by complying with regulations can this promising industry flourish.

References: cointelegraph, cointelegraph