What Happened?

The U.S. Securities and Exchange Commission (SEC) has withdrawn its appeal against Ripple Labs, ending a four-year-long legal dispute. This move is seen as a major victory for Ripple and the cryptocurrency industry.

The action has been interpreted by cryptocurrency lawyers and others as a “confirmation that XRP tokens are digital commodities, not securities.” This decision holds significant implications for the future development of XRP and the regulatory classification of other cryptocurrencies.

Despite the withdrawal of the appeal, Ripple still faces a $125 million judgment and an injunction preventing the sale of XRP to institutional investors. These issues remain unresolved and will impact Ripple’s future development strategy.

The SEC Withdraws Its Appeal Against Ripple

After years of legal disputes, the U.S. Securities and Exchange Commission (SEC) has finally withdrawn its appeal against Ripple Labs, a decision that has undoubtedly sent shockwaves through the cryptocurrency industry.

The SEC sued Ripple Labs in 2020, 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 a security, thus arguing that Ripple’s sales of the token violated relevant securities regulations.

This news quickly sparked investor enthusiasm, driving the price of XRP up by 10% in a short period, peaking at $2.57. According to CoinMarketCap data, as of the time of writing, XRP’s price stands at $2.48.

The lawsuit lasted for four years, affecting Ripple’s operations and drawing widespread attention from the entire cryptocurrency industry regarding regulatory definitions. Ripple has consistently argued that XRP is a digital commodity, not a security, and has actively defended itself.

Ripple’s Future Development

On March 19, 2025, Ripple’s CEO, Brad Garlinghouse, publicly stated that the SEC would withdraw its appeal against Ripple, marking the end of this four-year legal battle.

“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,” Garlinghouse wrote on Twitter.

Cryptocurrency lawyer John Deaton remarked that the SEC’s withdrawal of the appeal was “the final exclamation point,” confirming that XRP is considered a digital commodity, not a security. He believes this decision represents a significant 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,” Deaton shared in another tweet.

However, despite the SEC’s withdrawal, Ripple still faces another $125 million judgment due to past improper sales of XRP. Deaton believes that with the SEC’s appeal withdrawal, Ripple may now have stronger leverage to negotiate the settlement amount with the SEC.

Additionally, Ripple filed a counterclaim in October 2024. Deaton argues that the SEC does not want Ripple to continue with its counterclaim, as a favorable ruling for Ripple could undermine the SEC’s jurisdiction and affect its stance in other cases. This also gives Ripple an additional advantage in future settlement negotiations.

However, another issue remains: the injunction issued by Judge Analisa Torres, which prevents Ripple from selling XRP to institutional investors to avoid violating securities laws. Deaton points out that if Ripple wants to directly issue XRP to U.S. banks in the future, resolving this injunction will be crucial.

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 the leadership of former President Biden, the SEC had taken a tough enforcement stance against cryptocurrency companies, but current President Donald Trump is more favorable to this emerging industry and has pledged to make the U.S. the “cryptocurrency capital of the world.” Moreover, Trump has appointed industry-friendly leaders to key regulatory positions, bringing new hope to the cryptocurrency sector.

Reflecting on the lawsuit, Deaton believes it was initially an “attack” on the entire cryptocurrency industry. However, he believes it wasn’t only aimed at Ripple but also served as a warning from traditional financial systems and regulators to the industry. He emphasized that Ripple, even after facing a lawsuit from the U.S. government, never left the U.S., which is a favorable factor for the company.

While Ripple still faces some legal challenges, with the shift towards a more favorable policy environment and regulatory attitude, the cryptocurrency industry is expected to experience a clearer and more stable future. Ripple’s case also serves as a reminder for industry players that communication and cooperation with regulators are crucial. Only under compliance can this promising industry thrive.

Source: Cointelegraph