SEC and Ripple End Appeals, Closing Landmark Crypto Case as XRP Soars

In brief

The SEC and Ripple have dropped their respective appeals in the Second Circuit, with each party agreeing to cover its own legal costs.
In June, Ripple agreed to a $125 million penalty and escrowed the funds; today’s dismissal clears transfer to the Treasury, while the injunction on institutional XRP sales remains.
The 2023 ruling, which found public exchange sales of XRP were not securities while institutional sales were, will stand.

The U.S. Securities and Exchange Commission and Ripple Labs Inc. have formally closed their legal dispute, filing to end their respective appeals in the case over the sale of XRP tokens.

In a joint filing dated Thursday with the U.S. Court of Appeals for the Second Circuit, the SEC withdrew its appeal and Ripple abandoned its cross-appeal, with each party agreeing to bear its own legal costs.

The official end to the years-long dispute, finalizing a June agreement for Ripple to pay a $125 million civil penalty, coincided with a more than 10% jump in XRP over the past 24 hours to $3.31, according to CoinGecko.

That penalty, placed in escrow, will be transferred to the U.S. Treasury following the dismissal of the appeals. A permanent injunction restricting Ripple’s institutional sales of XRP remains in effect.

The SEC sued Ripple in December 2020, alleging the company and two of its executives conducted an unregistered securities offering by selling XRP, the world’s third-largest crypto by market capitalization.

Ripple denied the allegations, arguing that XRP is not a security.

In October 2023, the SEC dropped its claims against Ripple Chief Executive Brad Garlinghouse and Executive Chairman Chris Larsen, after a judge’s partial ruling in the company’s favor.

Both men had been accused of aiding and abetting Ripple’s alleged unregistered securities sales.

In 2023, U.S. District Judge Analisa Torres issued a split ruling, finding that some sales of XRP to institutional investors violated securities laws, but sales on public exchanges did not.

That decision was hailed as a partial victory for the crypto industry, though it left Ripple liable for institutional sales.

The conclusion of the appeals process leaves the 2023 ruling intact, cementing a precedent likely to influence how regulators and courts assess the classification of crypto going forward.