Ripple vs SEC: Why the XRP Legal Battle Still Isn’t Officially Over

Ripple and the U.S. Securities and Exchange Commission (SEC) have been embroiled in a yearslong legal dispute—and despite joint attempts to conclude the fight, it’s still not over.

In 2020, the SEC charged Ripple and two executives with conducting a $1.3 billion unregistered securities offering over its sales of XRP. In 2023, a judge ruled largely in Ripple’s favor, marking an optimistic point for the crypto industry’s regulatory battles. 

But the SEC later appealed that ruling, followed by a cross-appeal by Ripple. 

Since the election of President Donald Trump and the installation of crypto-friendly regulators, the pair have been working towards a resolution. However, legal challenges have prevented the two sides from marking the end of the protracted battle, though it appears that a proper finish may finally be right around the corner.

Here’s a look back at the recent twists and turns.

Ripple boss says ‘case has ended’ – March 19

In mid-March, Ripple CEO Brad Garlinghouse shocked the crypto world by announcing that the SEC was going to drop the appeal of its long-standing lawsuit against the firm.

“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,” Garlinghouse posted on X.

The news sent XRP up 14% and added to the pile of investigations and lawsuits that the regulator has backed away from under President Donald Trump’s administration. 

Ripple penalty slashed to $50 million – March 25

Though initially ordered to pay a $125 million fine, Ripple Labs said in March that the SEC agreed that it would pay just $50 million to end the dispute, with the additional $75 million returning to Ripple Labs after sitting in escrow. 

“The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” posted Ripple Chief Legal Officer Stuart Alderoty on X. 

Additionally, Aldeorty noted that Ripple had agreed to drop its cross-appeal, following the SEC’s decision the week prior.

Ripple, SEC file to suspend appeals – April 10

Having reached an agreement in principle in March, the parties filed their requests to suspend their respective appeals in April.

This marked the first official confirmation that the regulator had intentions to drop its appeal, though the filing indicated that it was still subject to approval from SEC commissioners.

“The parties require additional time to obtain Commission approval for this agreement-in-principle, and if approved by the Commission, to seek an indicative ruling from the district court,” the filing reads. 

Commissioner Crenshaw slams deal – May 8

Nearly a month after the filing, SEC Commissioner Caroline Crenshaw publicly denounced her agency’s settlement with Ripple Labs, saying that it undermined the court’s order and the agency and its enforcement actions. 

“This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public and undermines the court’s role in interpreting our securities laws,” Crenshaw said in a statement. 

Crenshaw added that the settlement was not in the best interest of investors and markets. 

Judge rejects settlement – May 16

A week after Crenshaw’s statement, a federal court judge rejected the joint bid from Ripple and the SEC to approve the settlement, which would have seen the former pay just $50 million of its original $125 million fine. 

The judge cited procedural errors in the filings that led to the decision, as the pair bypassed a rule that governed relief from final judgements. 

“Nothing in today’s order changes Ripple’s wins,” Alderoty posted after the judge’s order. “Ripple and the SEC are fully in agreement to resolve this case and will revisit this issue with the court, together.”

Ripple, SEC ask court to dissolve injunction – June 13

Nearly a month after procedural issues derailed settlement approval, the pair asked the court to dissolve the Ripple injunction and release the $125 million in escrowed funds from the original penalty. 

This marked the second time the parties had jointly sought to end the dispute that has been ongoing since 2020, but like previous attempts, it also needed to be approved by Judge Torres, who had denied them previously.

Denied again, $125 million penalty stands – June 26

Despite a second attempt at jointly ending the long legal battle between the SEC and Ripple, Judge Analisa Torres once more denied the pair last Thursday.

Torres cited a “compelling case” from the SEC built up over four years, and found the recent arguments seeking resolution to be lacking. Therefore, the judge refused to cut the $125 million payment or drop the injunction, as requested. 

“With this, the ball is back in our court,” posted Alderoty. “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.”

Ripple says it’ll drop appeal – June 27

Following the latest court denial, Garlinghouse said late Friday that Ripple has decided to drop its cross-appeal—and with the SEC previously saying it would drop its own appeal to the 2023 ruling, that should finally bring the case to a close.

“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said,” Garlinghouse wrote on X. “We’re closing this chapter once and for all, and focusing on what’s most important—building the internet of value. Lock in.”

Assuming all goes as planned, that should finally bring this long-running XRP saga to an end. Stay tuned for the filings that lock in the apparent conclusion.

Edited by Andrew Hayward