Ripple Labs CEO Brad Garlinghouse has announced that the company has decided to drop its cross-appeal in the lawsuit against the US Securities and Exchange Commission (SEC), bringing an end to the legal battle that has spanned over four years. The price of XRP spiked 4% following the update.
Garlinghouse announced Ripple’s decision via an X post and is expecting the SEC to simultaneously drop its appeal. He added that the company is “closing this chapter once and for all” to focus on its primary mission, which is to build the Internet of Value.
Ripple Settles with SEC for $50M After Judge Rejects Motion to Dismiss Charges
The announcement comes only a day after Judge Analisa Torres of the U.S. District Court of the Southern District of New York, which oversees the case, denied a joint motion from Ripple Labs and the SEC for an indicative ruling to reduce the $125 million civil penalty and reverse an order defining primary sales of XRP to institutional investors as securities transactions under Article 5 of the US Securities Act.
The judge told both parties that the court would not undo the earlier ruling, including the penalty imposed on Ripple, which was consistent with federal securities laws passed by Congress. They gave them two options: either to stipulate an appeal process to circumvent the court’s ruling and reduce the penalty over illegal XRP sales to $50 million, or end the litigation altogether by dropping each other’s appeals.
Ripple and the SEC have now chosen the second route instead of furthering the years-long legal battle. On Thursday, the crypto firm’s chief legal officer, Stuart Alderoty, said on X that the ball is back in its court. He also stated that Ripple’s position on XRP’s legal status as not a security remains unchanged, regardless of whether the lawsuit continues or not.
The SEC sued Ripple Labs, Brad Garlinghouse, and co-founder Chris Larsen for $2 billion in December 2020, alleging that the company had sold unregistered securities in the form of the XRP token to investors to raise $1.3 billion in capital, violating federal laws in the process.
Judge Ruled XRP is not a Security in itself, but Institutional Sales are deemed a Securities Transaction
A crucial court decision came in 2023, when Judge Torres ruled that “programmatic sales” of XRP on cryptocurrency exchanges to retail investors did not qualify as securities transactions, but the $728 million worth of XRP sold to institutional investors did constitute the sale of unregistered securities. The ruling was interpreted as a win by both Ripple and the crypto industry at the time.
In August 2024, the judge found Ripple guilty of violating securities laws through its institutional XRP sales and ordered the company to pay $125 million in penalties, a 94% reduction from the $2 billion fine the SEC under the Biden administration originally sought. However, she crucially ruled that XRP in itself is not a security, giving Ripple a massive advantage in the legal battle.
The SEC, then headed by Gary Gensler, subsequently appealed the court ruling, requesting a higher monetary fine, while Ripple filed a cross-appeal challenging the agency’s injunction and requesting that the court-decided fine stay in place.
However, after Donald Trump was inaugurated as president in January, the SEC began adopting a more friendly approach towards the crypto market, echoing the President’s promise to support the sector. The securities watchdog then began scrapping almost all lawsuits and investigations, agreeing to settlements with Binance, Kraken, Coinbase, and Uniswap.
Also Read: What is an Altcoin?
In March, Garlinghouse said in an X post that the SEC had dropped its appeal in the case, declaring it a “resounding victory” for Ripple and the broader crypto community. As part of the settlement, both parties filed a joint motion to release $125 million that Ripple held in escrow to cover the monetary penalties ordered by the court.
According to the filing, $50 million would go to the SEC, and the remaining $75 million would be returned to Ripple, pending court approval. However, Judge Torres denied this settlement agreement on June 27 on the grounds of procedural error and that it didn’t show “exceptional circumstances”.
XRP Price Rises, and Whale Wallet Activity Hints at Potential Price Breakout and ATH by Q4 2025
Within hours of both parties deciding to end the legal proceedings altogether, XRP’s price rallied to $2.18, and at press time, continues to move upwards. The native token of the XRPL blockchain has soared a record 347% in the past year, becoming one of the standout market performers.
XRP registered an all-time high of $3.40 in January, but its price has since regressed, making modest returns on investment. Despite closing consistently above the $2 mark since December 2024, XRP’s trading volume on leading crypto exchanges has fallen to its lowest level since August 2020, reflecting a decline in market demand.
Recent data from CryptoQuant suggests that Ripple whale addresses could be positioning themselves for an imminent price breakout, particularly as the 90-day moving average whale flows for XRP shifted to the positive territory in May. This is a sharp reversal from the negative flows observed between January and April, a period that marked a prolonged correction phase for the fourth-largest cryptocurrency by market cap.
Renewed whale capital influx signals strengthening market sentiment for XRP. Data also shows that bullish whale inflows began in August 2024, eventually correlating with the 420% price breakout for XRP in Q4. This also coincided with Trump’s election victory in November 2024.
Whale wallets holding over 1 million XRP have hit an all-time high of 2,850, while those with more than 10,000 XRP reached 306,000, a 6.2% year-to-date increase. This magnitude of inflows, which have already surpassed last year’s levels, could be the catalyst for XRP to target new peaks as early as Q4 2025.
Data analytics firm Santiment pointed out that XRP sentiment has reached a 17-day high following the announcement of the $50 million settlement between Ripple Labs and the SEC. Despite several months of stagnant price action, persistent growth in large-scale accumulation points to robust long-term investor confidence in XRP.
At the time of writing, XRP is trading at $2.18, up 4.16% in the last 24 hours.
