After nearly four years of legal wrangling, the US Securities and Exchange Commission (SEC) and Ripple Labs officially settled their case in March 2025—a milestone moment. This final settlement not only resolved the financial penalties involved but, more importantly, clarified that XRP is not a security under current US law when sold to the general public. However, there is still room for interpretation when it comes to the sale of XRP to institutional investors. Indeed, the court’s original ruling still stands until the court clears the injunction.
The origins of the case date back to 2020 when the SEC, under the leadership of Gary Gensler, sued Ripple. The Commission alleged that Ripple had conducted unregistered securities offerings through its sale of XRP. In a partial ruling in 2023, the court had already differentiated between public programmatic sales and institutional sales of XRP. The judge determined that XRP sold to the general public via exchanges did not constitute securities offerings, whereas some direct sales to institutions did.
New SEC Leadership Ushers in Softer Crypto Stance
Following President Donald Trump’s return to office in 2025, the US Securities and Exchange Commission (SEC) underwent significant leadership changes. These impacted its approach to cryptocurrency regulation. Gary Gensler stepped down as SEC Chair on Jan. 20, 2025, and President Trump appointed Mark T. Uyeda as Acting Chair, pending the confirmation of Paul S. Atkins.
Under this new leadership, the SEC signaled a shift toward a more lenient stance on crypto enforcement. The settlement of the long-standing lawsuit against Ripple Labs exemplified this change. The SEC and Ripple agreed that the fintech company would pay $50 million to settle the case over XRP sales, a significant reduction from the initially imposed $125 million fine.
Indeed, the March 2025 settlement brought closure to the case. Ripple agreed to pay the civil penalty, but—crucially—the SEC dropped all remaining claims. The resolution affirmed that XRP is not a security and that Ripple can legally continue its business, provided it complies with standard financial regulations when dealing with institutional clients. This gives Ripple a more transparent legal framework for selling XRP to US institutions.
Ripple’s Path Forward: Compliance, RLUSD, and Institutional Expansion
That said, while XRP is no longer considered a security, how Ripple sells XRP to institutions still matters. Direct sales must be structured carefully to avoid resembling investment contracts. Ripple must either register those offerings or qualify them under exemptions such as Regulation D. As a result, Ripple has shifted toward more compliant infrastructure and sales strategies. These strategies include incorporating identity verification, disclosures, and transparent operational frameworks.
The company’s launch of RLUSD, a US dollar-backed stablecoin, in late 2024 is part of this strategy. By offering institutions a stable, regulated bridge asset, Ripple reduces the need for direct XRP sales in sensitive contexts while integrating XRP into its broader ecosystem. In tandem, Ripple continues to upgrade the XRP Ledger to support institutional use cases like tokenized assets, lending, and cross-border settlement, further solidifying XRP’s utility without relying solely on token sales.
Importantly, the March 2025 settlement sends a strong signal to US banks and financial institutions: partnering with Ripple no longer carries the extreme legal uncertainty that once clouded its operations. As a result, institutional adoption is expected to accelerate. This is especially true as Ripple expands its compliance-first approach and engages with regulators to help shape future digital asset policy.
In summary, the leadership changes and subsequent policy shifts at the SEC under President Trump’s administration have marked a notable transformation in the regulatory landscape for cryptocurrencies.
Ripple can now legally sell XRP to institutions in the US, as long as those transactions meet regulatory requirements. The March 2025 settlement has provided long-sought clarity, confirming that XRP is not a security and opening the door to more robust, compliant institutional engagement. For Ripple—and the crypto industry at large—it’s a significant turning point.
