Ripple Labs Wins as SEC Drops Appeal Over Crypto Regulation

Ripple Labs announced on Wednesday that the U.S. Securities and Exchange Commission (SEC) has officially withdrawn its appeal against a court ruling concerning cryptocurrency regulation. This marks a significant legal win for Ripple in its longstanding battle with the regulator.

The SEC had initially appealed a decision made by U.S. District Judge Analisa Torres in July 2023. The judge had ruled that the XRP token, when sold on public exchanges, did not qualify as a security under federal law. However, the court also determined that Ripple’s $728 million worth of XRP sales to institutional investors did violate securities laws. As a result, Ripple was fined $125 million, though the penalty was temporarily paused while Ripple pursued its own appeal.

Following the SEC's withdrawal, Ripple CEO Brad Garlinghouse expressed his satisfaction, calling it a "resounding victory" and a "long overdue surrender" by the regulator. Similarly, Ripple’s Chief Legal Officer Stuart Alderoty emphasized the company's strengthened legal position, stating they would assess the next steps in their cross-appeal.

While the SEC did not provide any comments on the matter, the decision signals a broader shift in the agency’s approach toward cryptocurrency regulation. Since the start of President Donald Trump’s second term in January, the SEC has softened its stance, opting to dismiss lawsuits against prominent crypto exchanges like Coinbase and Kraken. Additionally, the agency hinted at the potential resolution of its civil fraud case against Chinese entrepreneur Justin Sun.

In a further development, Trump nominated Paul Atkins, a legal expert viewed as favorable to the cryptocurrency sector, to chair the SEC. Atkins is set to replace Gary Gensler, who faced criticism from the crypto industry during his tenure.

The SEC's lawsuit against Ripple began in December 2020, just weeks before Trump concluded his first term. With the regulator's appeal now abandoned, Ripple Labs gains a substantial advantage as it moves forward in the ongoing legal process.

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