Ripple CEO Announces SEC’s Decision to Drop Appeal in Long-Running Lawsuit

Ripple CEO Announces SEC’s Decision to Drop Appeal in Long-Running Lawsuit

Ripple Labs CEO Brad Garlinghouse took to X (formerly Twitter) on Wednesday to share a significant update regarding the company’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).

“I’m finally able to announce that this case has ended. It’s over,” Garlinghouse stated in the video post. “Today marks a victory and a long-overdue surrender from the SEC.”

The lawsuit, which has spanned four years, saw a pivotal moment in 2023 when a federal judge in New York ruled partially in Ripple’s favor. The court determined that the company’s programmatic sales of XRP on secondary markets did not constitute securities transactions, while sales made directly to institutional investors did fall under securities regulations. However, the SEC subsequently filed an appeal, seeking to overturn the decision.

While Garlinghouse has confidently declared the case closed, the SEC itself has yet to make an official announcement confirming the withdrawal of its appeal. According to CoinGecko data, the price of XRP surged as much as 14% to $2.55 following Garlinghouse’s remarks.

A Ripple spokesperson told Decrypt that the SEC’s decision is still subject to a Commission vote and approval. They indicated that the formal withdrawal process could take “several weeks,” emphasizing that the timeline remains entirely under the SEC’s control. When approached for comment, the SEC declined to provide further details regarding the case.

In August, a federal court ordered Ripple to pay a $125 million fine for XRP sales to institutional investors—significantly lower than the $2 billion penalty initially sought by the SEC. It remains unclear how the SEC’s decision to drop its appeal might impact the ruling in the Southern District of New York.

The SEC’s shift in stance was widely anticipated, particularly given the regulator’s recent retreat from several high-profile enforcement actions under Acting Chair Mark Uyeda. Notably, the agency has scaled back its lawsuits against crypto exchanges Coinbase and Kraken in recent months.

Had the SEC prevailed in its case against Ripple, the outcome could have set a far-reaching precedent for how cryptocurrencies are classified—potentially reshaping the debate over whether they should be treated as securities or commodities.

Speaking to Decrypt last October, Ripple’s Chief Legal Officer Stuart Alderoty predicted that the SEC’s appeal would ultimately “backfire.” While he expressed confidence that the Second Circuit Court of Appeals would side with Ripple, he also pointed out that the SEC retained the power to withdraw its appeal at any time.

Now, it appears the agency has chosen to do just that.