In a landmark resolution to one of the most closely watched legal battles in the cryptocurrency industry, Ripple has officially dropped its cross appeal against the U.S. Securities and Exchange Commission (SEC). This decisive move signals the end of a nearly five-year-long legal saga that began in December 2020 and has significantly influenced the regulatory landscape for digital assets.
With both Ripple and the SEC abandoning their respective appeals, the long-standing XRP lawsuit is now effectively concluded. The decision marks a pivotal moment not only for Ripple but for the broader crypto ecosystem, offering clarity on how digital tokens may be classified under U.S. securities law.
Final Resolution: Appeals Withdrawn
In a public announcement via X (formerly Twitter), Ripple CEO Brad Garlinghouse confirmed that the company is formally withdrawing its cross appeal. Simultaneously, the SEC is expected to drop its own appeal, bringing finality to the litigation.
“We’re closing this chapter once and for all and focusing on what matters — building the Internet of Value,” Garlinghouse stated.
This resolution comes just one day after Judge Analisa Torres denied a joint motion from both parties seeking an indicative ruling on whether the court would approve their proposed settlement. However, she had previously indicated that the most straightforward path to ending the case was for both sides to voluntarily dismiss their appeals — a route they have now taken.
Legal experts, including Fred Rispoli, had anticipated this outcome, noting that challenging Judge Torres’ injunction in the appellate court would be an uphill battle. By mutually dropping the appeals, the original injunction remains in place, but with a crucial modification: Ripple will pay a $50 million civil penalty — significantly less than the $125 million initially ordered.
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Timeline and Key Legal Milestones
The lawsuit originated in December 2020 when the SEC filed charges against Ripple Labs, alleging that its sale of XRP constituted an unregistered securities offering. The case quickly became a litmus test for how U.S. regulators would treat cryptocurrencies.
A turning point came in July 2023 when Judge Torres ruled that while institutional sales of XRP violated securities laws, XRP itself is not inherently a security. This nuanced decision was celebrated across the crypto community, as it distinguished between how a token is sold and what the token fundamentally is.
Following this partial victory, Ripple filed a cross appeal to challenge the ongoing injunction and seek a reduction in penalties. The SEC, dissatisfied with the court’s refusal to classify XRP as a security outright, appealed the ruling on jurisdictional grounds and sought a higher penalty.
However, shifts in the regulatory climate — particularly after changes in U.S. political leadership — led to a more cooperative stance from the SEC toward the crypto industry. This paved the way for behind-the-scenes negotiations and an eventual agreement to settle for $50 million and request dissolution of the injunction.
Despite two rejected motions by Judge Torres — citing procedural errors and lack of “exceptional circumstances” — both parties chose not to prolong the legal battle. Instead, they opted for finality through appeal withdrawal.
Market Reaction and XRP Price Surge
The news triggered an immediate positive response from the market. XRP price spiked to as high as $2.149, reflecting strong investor confidence in the resolution.
According to CoinMarketCap data, XRP saw nearly a 2% increase within one hour of the announcement and maintained gains over the next 24 hours, recovering from earlier dips. The rally underscores how regulatory clarity can directly influence market sentiment and asset valuation.
This momentum aligns with broader optimism in the crypto space, where clear legal frameworks are increasingly seen as essential for institutional adoption and long-term growth.
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Why This Matters for Crypto Regulation
The conclusion of the XRP lawsuit sets a powerful precedent. While the court did not grant Ripple a complete win, its recognition that XRP is not a security by nature provides critical guidance for other blockchain projects navigating U.S. regulations.
Key takeaways include:
- Token classification depends on context: How a token is sold (e.g., to institutions vs. public) matters more than the token itself.
- Regulatory enforcement must be consistent: The case highlighted inconsistencies in how different cryptocurrencies are treated by regulators.
- Legal clarity drives innovation: With reduced uncertainty, companies can focus on product development rather than litigation.
For developers, investors, and exchanges, this outcome reinforces the importance of compliance-by-design and transparent token distribution models.
Frequently Asked Questions (FAQ)
What does it mean that Ripple dropped its cross appeal?
Dropping the cross appeal means Ripple is no longer contesting parts of Judge Torres’ ruling, including the injunction and penalty. It signifies acceptance of the court’s decision and a strategic shift toward future growth.
Did Ripple win or lose the lawsuit?
It was a partial win. The court ruled XRP is not a security, which was a major victory. However, Ripple was found liable for unregistered sales to institutions and must pay a $50 million penalty.
Will the injunction against Ripple remain?
Yes, unless formally dissolved by Judge Torres. While both parties requested its removal, her prior denials suggest it may stay in place unless new motions are filed.
How does this affect other cryptocurrencies?
The ruling supports the argument that digital assets can be decentralized and non-security in nature if distributed properly. This could benefit other projects facing similar regulatory scrutiny.
Is XRP now fully compliant with U.S. law?
While not automatically compliant, the resolution removes major legal overhangs. Exchanges and institutions may now feel more confident listing or investing in XRP.
What’s next for Ripple?
Ripple plans to focus on expanding its payment solutions, global partnerships, and initiatives like central bank digital currencies (CBDCs) and stablecoins such as RLUSD.
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Looking Ahead: The Internet of Value
With this legal chapter closed, Ripple is redirecting its energy toward its original mission: building what it calls the “Internet of Value” — a global, real-time settlement network for financial transactions powered by blockchain technology.
The company continues to expand its presence in international markets, working with financial institutions and central banks to modernize cross-border payments. The resolution of the SEC case removes a significant barrier to wider adoption and collaboration.
As the crypto industry evolves, cases like this underscore the need for balanced regulation that fosters innovation while protecting investors. The end of the XRP lawsuit may well be remembered as a turning point toward greater regulatory maturity in digital finance.
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