The years-long legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has officially come to a close. In a significant development for the cryptocurrency industry, both parties have decided to drop their appeals in the U.S. Court of Appeals for the Second Circuit, effectively ending one of the most closely watched regulatory cases in crypto history.
This resolution marks a pivotal moment not only for Ripple but for the broader digital asset ecosystem, offering clearer regulatory signaling and reducing long-standing market uncertainty. While the conclusion comes with lingering restrictions, the outcome reinforces key precedents—particularly around the classification of digital tokens.
Judge Torres Denies Motion to Modify Judgment
Prior to the mutual decision to end the appeals, Ripple and the SEC jointly filed a motion requesting that Judge Analisa Torres modify her original ruling. The request sought to reduce Ripple’s civil penalty from $125 million to $102.6 million and to lift the permanent injunction on institutional sales of XRP.
However, Judge Torres denied the motion, emphasizing that neither party had demonstrated the “exceptional circumstances” required to alter a final judgment under federal procedural rules. As a result, the original terms of the ruling—including the financial penalty and restrictions on institutional XRP sales—remain legally binding.
Despite this setback, Ripple’s leadership signaled a strategic pivot. Rather than prolonging litigation over an already settled core issue, the company chose to accept the status quo and focus on future growth.
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Stuart Alderoty Confirms Shift in Legal Strategy
Ripple’s Chief Legal Officer, Stuart Alderoty, publicly acknowledged the court’s response and outlined the company’s next steps. In a widely shared social media post, Alderoty noted that the court had given Ripple two options: continue appealing the institutional sales finding or dismiss the appeal.
“With this, the ball is back in our court. The Court gave us two options: dismiss our appeal challenging the finding on historic institutional sales—or press forward with the appeal. Stay tuned. Either way, XRP’s legal status as not a security remains unchanged.”
The message was clear: regardless of further litigation, the landmark 2023 ruling that XRP is not a security when sold to retail investors stands firm. This classification has become a cornerstone precedent in U.S. crypto regulation, influencing how other projects structure their token distributions and investor engagements.
By stepping away from additional appeals, Ripple avoids extended legal costs and reputational drag, allowing it to redirect resources toward product development, global expansion, and strategic partnerships.
Brad Garlinghouse: “Closing This Chapter Once and for All”
CEO Brad Garlinghouse confirmed the end of the legal saga with a definitive statement on X (formerly Twitter), declaring that Ripple is dropping its cross-appeal and expects the SEC to do the same.
“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said. We’re closing this chapter once and for all, and focusing on what’s most important – building the Internet of Value. Lock in.”
Garlinghouse’s remarks underscore Ripple’s renewed focus on its core mission: leveraging blockchain technology to transform cross-border payments and create an “Internet of Value” where money moves as freely as information.
With regulatory overhang lifted—even if partial—the company can now pursue new business opportunities without the constant shadow of litigation.
What This Means for XRP and the Crypto Industry
The resolution brings both clarity and limitations for XRP holders and market participants.
Key Outcomes:
- XRP is Not a Security (for Retail Sales): The 2023 ruling confirmed that XRP does not qualify as a security when sold to retail investors, setting a critical benchmark for other token projects navigating U.S. securities laws.
- Institutional Sales Remain Restricted: Ripple cannot freely sell XRP to institutional buyers without triggering regulatory scrutiny. This constraint may impact its fundraising flexibility but does not hinder existing operations.
- Reduced Penalty Finalized: Although Judge Torres denied the joint motion, Ripple will pay $102.6 million—slightly less than the original $125 million fine—marking a partial financial reprieve.
- Uncertainty Lifted: For years, XRP’s price and adoption were weighed down by legal ambiguity. Now, exchanges, developers, and investors can engage with greater confidence.
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Frequently Asked Questions (FAQ)
Q: Is XRP now fully cleared as a non-security?
A: Not entirely. The court ruled that XRP is not a security when sold to retail investors, but institutional sales were deemed to fall under securities laws in certain contexts. This distinction remains important for compliance.
Q: Can Ripple sell XRP to institutions again?
A: Not under current restrictions. The permanent injunction on unregistered institutional sales remains in place unless modified by future regulatory action or new legal proceedings.
Q: Does this ruling affect other cryptocurrencies?
A: Yes. While each token is evaluated case-by-case, Ripple’s precedent strengthens arguments that widely distributed digital assets with decentralized ecosystems may not meet the Howey Test for securities.
Q: Will XRP’s price increase after the lawsuit ends?
A: Market reactions depend on multiple factors, but reduced regulatory risk typically boosts investor sentiment. Historical data shows volatility following major legal updates—caution and research are advised.
Q: What’s next for Ripple?
A: Ripple will focus on expanding its payment solutions, particularly through its On-Demand Liquidity (ODL) service, while advocating for clearer crypto regulations in the U.S. and abroad.
Q: Could the SEC revisit this case in the future?
A: Unlikely. With both appeals dropped and judgments finalized, the matter is considered legally resolved unless new evidence or legislative changes emerge.
The Bigger Picture: Regulatory Clarity and Market Confidence
The Ripple-SEC case has been more than a corporate dispute—it’s been a test of how existing financial regulations apply to decentralized technologies. Its conclusion offers valuable lessons:
- Legal frameworks must evolve: Outdated securities definitions struggle to capture modern token economics.
- Precedent matters: Ripple’s partial win provides legal ammunition for other projects facing similar challenges.
- Certainty drives innovation: Developers and investors are more likely to commit capital when rules are predictable.
As governments worldwide grapple with crypto regulation, the U.S. needs comprehensive legislation—not piecemeal litigation—to foster innovation while protecting consumers.
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Final Thoughts
The end of Ripple’s legal battle with the SEC isn’t just a win for one company—it’s a milestone for digital asset legitimacy. While compromises were made, the core victory stands: XRP is not a security for retail markets, and Ripple can now operate with renewed focus.
For investors, builders, and regulators alike, this case underscores a simple truth: clarity fuels progress. As the crypto ecosystem matures, such precedents will continue to shape how value moves across borders—and who gets to participate in building the financial systems of tomorrow.