The United States Securities and Exchange Commission (SEC) formally dropped its appeal against Ripple Labs today, ending a lengthy legal battle that began in December 2020.
The settlement includes numerous critical conditions that favor Ripple above Judge Analisa Torres’ original August 2024 order, decreasing Ripple’s $125 million punishment for institutional XRP sales.
Furthermore, the permanent injunction that barred Ripple from selling XRP to institutional investors has changed to create a clear path for regulated institutional sales.
A Regulatory Shift in Crypto Classification
The SEC’s acknowledgment of XRP as a commodity rather than a security establishes a precedent that could influence the regulation of other digital assets.
Stuart Alderoty, Ripple’s Chief Legal Officer, who previously characterized the SEC appeal as “noise” that would likely be abandoned by the incoming administration, expressed satisfaction with the outcome.
He stated,
“This resolution allows Ripple to move forward with certainty and focus on building innovative blockchain solutions for the financial industry.”
The case’s conclusion may have also been partially due to Ripple’s increased engagement in US politics. For example, it made a $25 million contribution to Fairshake, a political action committee focused on cryptocurrency and a $5 million donation in XRP to President Donald Trump’s inauguration fund.
However, Alderoty has denied suggestions that political contributions influenced the SEC’s stance, attributing the changes to Uyeda’s leadership.
The Road Ahead for Ripple
The case’s conclusion sets Ripple up for a future expansion of its operations and relationships, notably in the institutional space. Its cross-border payment solutions, which employ XRP for liquidity, could be more readily adopted by banks and financial institutions that were once skeptical due to regulatory concerns.
Moreover, the ruling provides a guide for other cryptocurrency businesses dealing with comparable legal problems and creates a significant precedent for upcoming crypto-related affairs.
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