Ripple has dropped its appeal, signaling a potential end to its prolonged legal battles with the U.S. Securities and Exchange Commission (SEC). The decision follows Judge Analisa Torres' refusal to modify her original ruling, which classified institutional sales of XRP as unregistered securities while exempting retail sales.
Here’s what investors need to know about the implications of this development and key factors to monitor as the case nears resolution.
Ripple’s Legal Battle: A Timeline
The SEC sued Ripple Labs in 2020, alleging that XRP was sold as an unregistered security. The case became a benchmark for cryptocurrency regulation. In 2023, Judge Torres issued a split verdict:
- Institutional sales of XRP violated securities laws, resulting in a $125 million fine and an injunction.
- Retail sales were deemed compliant.
Both parties initially planned to appeal. However, under the new SEC leadership, the agency dropped similar crypto-related cases. Ripple and the SEC jointly requested to lift the injunction and reduce the fine to $50 million, but Judge Torres rejected the motion, citing unchanged facts and public interest.
Ripple subsequently withdrew its appeal, urging the SEC to do the same.
Investor Implications
XRP’s price initially dropped 5% post-ruling but rebounded after Ripple’s appeal withdrawal. Despite a 300% surge since the 2024 U.S. election, further short-term gains seem unlikely as optimism may already be priced in.
Long-term considerations:
- Market Cap Comparison: XRP’s $130 billion valuation dwarfs PayPal’s $65 billion, raising questions about its relative value.
- Institutional Sales Ban: The injunction’s impact remains unclear, but Ripple’s push to lift it hints at operational constraints.
👉 Discover how XRP compares to traditional payment giants
Key Indicators for XRP’s Future
- SEC Appeal Status: Confirmation that the SEC drops its appeal would formally conclude the case. Former SEC litigator Marc Fagel estimates a 1–2 month timeline for this decision.
- Stablecoin Growth: Ripple’s RLUSD stablecoin, launched in late 2024, aims to expand the XRP ecosystem but risks cannibalizing XRP’s market share.
- ETF Approval: Bloomberg analysts rate the chance of an XRP ETF approval at 90%, which could boost institutional investment.
- Partnerships: Ripple’s blockchain-based payment solutions already partner with major banks. Progress in U.S. stablecoin legislation may attract more collaborators.
FAQs
Q: Why did XRP’s price drop after the ruling?
A: The denial of Ripple’s motion reinforced regulatory uncertainty, triggering a brief sell-off.
Q: Is XRP a good investment post-ruling?
A: While legal clarity is positive, XRP’s high valuation and competition from stablecoins warrant caution.
Q: What’s next for Ripple?
A: Focus shifts to ecosystem growth, including RLUSD adoption, ETF approvals, and new partnerships.
👉 Explore Ripple’s latest developments
Conclusion
The resolution of Ripple’s legal saga removes a major overhang but underscores the need for tangible progress in adoption and regulatory milestones. Investors should watch ETF approvals, stablecoin performance, and partnership announcements for directional cues.