SEC’s Case Against Ripple (XRP) Nears Conclusion After Four-Year Battle

Legal Fight Over XRP Could Be Coming to an End Amid Regulatory Shifts

The U.S. Securities and Exchange Commission (SEC) may finally be closing its enforcement action against Ripple Labs after more than four years of legal wrangling.

A Case That Shaped Crypto Regulation

According to Fox Business reporter Eleanor Terrett, the case is now “in the process of wrapping up” after both parties filed an appeal and cross-appeal over a $125-million court judgment issued in August 2024. The SEC originally filed the lawsuit in December 2020, accusing Ripple and some of its executives of using XRP ($XRPUSD) as an unregistered security to raise funds.

Ripple’s chief legal officer, Stuart Alderoty, told Cointelegraph on March 11 that this case is “far more advanced” than other SEC enforcement actions that were dropped following the inauguration of President Donald Trump and the departure of SEC Chair Gary Gensler. Since January, the agency has declined to pursue cases against major crypto firms like Coinbase, Consensys, and Kraken.

While Alderoty acknowledged the case’s complexity due to the appeal process, he expressed optimism about reaching a resolution with the SEC. “If we don’t, we’ll proceed with the appeal,” he added.

Potential Endgame for the SEC v. Ripple Battle

If both sides agree to end the case, several possible outcomes could emerge. Should Ripple and the SEC mutually drop their appeals in the Second Circuit, the original $125-million judgment would remain in effect. However, if there’s disagreement over the financial ruling, the two parties would need to request a modification from a judge together.

The case has already set a major legal precedent for the crypto industry. Judge Analisa Torres ruled that XRP was not a security under SEC oversight when sold programmatically on exchanges, marking a significant victory for Ripple.

As of now, no formal filings indicate the SEC’s intention to withdraw the case, with no updates on dockets from either the U.S. District Court for the Southern District of New York or the Second Circuit Court of Appeals.

Political Influence or Regulatory Shift?

The SEC originally filed its lawsuit against Ripple under former Chair Jay Clayton, but the agency ramped up enforcement actions under Gensler, who took over in 2021.

Ripple CEO Brad Garlinghouse suggested in a December 2024 interview that the company might have avoided deeper involvement in U.S. politics if the SEC had taken a different regulatory approach under Gensler. Ripple has since contributed millions to political action committees, including a $45-million donation to Fairshake during the last election cycle and another $25 million in November 2024.

Following Trump’s election victory, Ripple also pledged $5 million in XRP to his inauguration fund. Garlinghouse and Alderoty both attended Washington, D.C. events on January 20 as official guests. Alderoty personally contributed over $300,000 to political fundraising efforts supporting Trump.

These contributions have raised concerns among critics, who point to a possible correlation between donations to Trump and Republican-backed initiatives and the SEC’s decision to drop enforcement actions. Coinbase, another major Fairshake donor, had its SEC lawsuit halted in February and its CEO, Brian Armstrong, was among industry leaders who attended a White House crypto summit on March 7 alongside Garlinghouse.

However, Alderoty has dismissed claims that political donations influenced the SEC’s decisions, suggesting instead that Acting Chair Mark Uyeda’s regulatory philosophy is responsible for the shift.

What’s Next for Crypto Regulation?

The SEC’s leadership remains in flux. While former Commissioner Paul Atkins has been floated as a potential nominee to lead the agency, the U.S. Senate has yet to schedule a confirmation hearing. Current Commissioner Hester Peirce noted in February that the SEC is unlikely to set a new crypto regulatory agenda until a new chair takes office.

For now, Ripple - and the broader crypto industry - awaits the final word on whether the SEC’s years-long case will officially come to an end.