Ripple CEO Brad Garlinghouse announced that the U.S. Securities and Exchange Commission (SEC) will drop its appeal against the cryptocurrency firm.
The decision brings closure to a legal battle lasting over four years. The case began in December 2020 when the SEC accused Ripple of selling XRP tokens worth $1.3 billion without registering them as securities. The SEC argued that XRP was a security, similar to stocks or bonds, and should have followed specific regulations.
Ripple strongly disagreed with the SEC’s accusation. The company argued that XRP is not a security. Instead, Ripple explained that XRP is a digital currency designed for quick international transactions, similar to Bitcoin and Ethereum, which were not considered securities by the SEC.
The case lasted more than four years and became a major event in the cryptocurrency industry. It was closely watched because its outcome could set an important legal precedent. If XRP were classified as a security, other cryptocurrencies could face similar regulations.
Ripple won the case partially in July 2023. A judge ruled that XRP was not necessarily a security, particularly when sold to the general public. However, the judge also found Ripple violated securities laws by selling XRP directly to large institutional investors.
As a result of that decision, Ripple was facing a potential fine of around $125 million for the violations related to institutional sales. Ripple decided to appeal parts of this decision, and the SEC also appealed the parts it lost.
Ripple’s Chief Legal Officer, Stuart Alderoty, also confirmed the SEC’s decision. However, Alderoty’s announcement did not clearly address whether Ripple still faces a $125 million fine previously imposed due to the parts of the lawsuit Ripple lost earlier.
CEO Garlinghouse Declares Historic Win at Digital Asset Summit
Garlinghouse first revealed the news at the Digital Asset Summit in New York. He told the audience he had just received confirmation that the SEC decided not to continue its appeal.
“We’re now closing a chapter in crypto history,” Garlinghouse said. He expressed hope that this outcome would encourage innovation in cryptocurrencies within the United States. He also urged the U.S. to become the global leader in crypto.
In his statement, Garlinghouse thanked Ripple’s supporters, employees, legal team, customers, and partners. He especially expressed gratitude toward the XRP community, who closely followed and supported Ripple throughout the lawsuit.
Garlinghouse praised the new leadership at the SEC and the U.S. government. He acknowledged their recent efforts toward developing clearer, more practical cryptocurrency regulations.
The Ripple CEO also emphasized the significance of this decision. He stated the outcome sends a strong message supporting innovation and removes previous fears created by the SEC under former chairman Gary Gensler.
XRP Token Jumps Nearly 10% Following Announcement
Following the announcement, the price of Ripple’s XRP token jumped about 9% within an hour and became the third-largest cryptocurrency by market value.
XRP now holds a market capitalization of approximately $146 billion.
The news positively impacted other cryptocurrencies, too, as several tokens also experienced minor gains.
