Ripple and SEC Legal Battle: Important Notice Issued
The Securities and Exchange Commission (SEC) and Ripple have officially ended their legal battle, with the U.S. Second Circuit Court of Appeals dismissing both the SEC's appeal and Ripple's cross-appeal on August 7, 2021.
The joint stipulation to dismiss the appeals was filed with the United States Court of Appeals for the Second Circuit, not the district court. The Ripple case, which involves Ripple Labs, Brad Garlinghouse, and Chris Larsen, was initially filed with the district court.
The SEC's lawsuit against Ripple, filed in December 2020, alleged that the company sold XRP tokens without registering them as securities. The lawsuit also involved allegations against Ripple Labs, Garlinghouse, and Larsen for not registering XRP tokens as securities.
The SEC's appeal was against parts of the case, opposing Judge Torres’ ruling that programmatic sales of XRP did not constitute securities offerings. Ripple cross-appealed regarding institutional sales of XRP subject to securities laws, which led to a $125 million fine and a permanent injunction against certain sales.
After a pro-crypto administration took office in January 2025, both parties agreed to dismiss their appeals. They also agreed to reduce the fine from $125 million to $50 million and remove the permanent injunction, though Judge Torres denied this request.
The Joint Stipulation of Dismissal resolves the Commission's civil enforcement action against the defendants in the Ripple case. The court approval awaited for the Joint Stipulation of Dismissal is from the United States Court of Appeals for the Second Circuit. Judge Torres has no further involvement in the Ripple case as the court approval is being sought from the United States Court of Appeals for the Second Circuit.
Former SEC regional director, Marc Fagel, has reminded that Judge Torres has no further role in the Ripple case amid online speculation of a court decision being awaited from Judge Torres. Ripple declared an end to the five-year lawsuit with the SEC when Stuart Alderoty, Ripple's chief legal officer, stated the dismissals marked "the end" of the case.
In a status report submitted to the Court of Appeals, the SEC stated that both parties have filed a Joint Stipulation of Dismissal of the appeals in the Ripple case. The court's approval of this stipulation officially ends the SEC enforcement action against Ripple, bringing the nearly five-year legal battle to a close with the 2023 federal judge's mixed ruling standing as final.
[1] CoinDesk. (2021, August 10). Ripple Wins as SEC Drops Appeal, Cross-Appeal in XRP Case. Retrieved from https://www.coindesk.com/ripple-wins-as-sec-drops-appeal-cross-appeal-in-xp-case
[4] CoinDesk. (2021, August 10). Ripple Wins as SEC Drops Appeal, Cross-Appeal in XRP Case. Retrieved from https://www.coindesk.com/ripple-wins-as-sec-drops-appeal-cross-appeal-in-xp-case
[5] CoinDesk. (2021, August 10). Ripple Wins as SEC Drops Appeal, Cross-Appeal in XRP Case. Retrieved from https://www.coindesk.com/ripple-wins-as-sec-drops-appeal-cross-appeal-in-xp-case
- The prices of crypto tokens, such as Bitcoin and Ethereum, might subsequently see a surge in trading on crypto exchanges following the dismissal of the SEC's appeal against Ripple.
- In light of the SEC and Ripple ending their legal battle, the finance and technology sectors, including the business of crypto, may experience significant changes.
- With the Ripple case now dismissed, there has been a decrease in uncertainty surrounding the status of XRP tokens and the securities laws that govern them.
- Businesses involved in the trading of cryptocurrencies like Bitcoin, Ethereum, and Ripple's XRP may find it easier to operate and plan for the future due to the resolution of the Ripple case.
- The price prediction for XRP, as well as the overall cryptocurrency market, may be influenced by the SEC's decision to drop its appeal and the potential impact on the regulatory landscape for digital assets.
