Brad Garlinghouse, the CEO of Ripple, announced on Wednesday that the Securities and Exchange Commission has dropped its appeal in its lawsuit against the crypto firm, ending a years-long legal battle in the courts.
The appeal centered on a federal court’s decision last fall that Ripple’s sales of XRP cryptocurrency did not have to comply with investor protection laws.
The SEC filed suit against Ripple in 2020 for conducting what it claimed was an unregistered securities offering. This was an abrupt about-face from the U.S. government’s position in 2015 that XRP was a virtual currently. This change in stance pulled the rug out from XRP holders and created confusion in the crypto industry.
In July 2023, a federal judge ruled that the sale of XRP in the open market was not a securities offering, acknowledging that the cryptocurrency was not inherently a security.
However, the sale of XRP could be considered an unregistered security offering if sold to institutional investors. In July 2024, Ripple was ordered to pay a fine for selling to institutional investors without first registering with the SEC, but the $125 million fine was far less than the $2 billion amount that the SEC had sought.
The SEC’s decision to drop its appeal in the case against Ripple is in line with the organization’s recent moves to drop enforcement actions against other crypto firms. This week, a newly formed SEC crypto task force will begin clearly defining the security status of digital assets, CNBC reported.
In a social media post on March 19, Garlinghouse described the SEC’s decision to drop the appeal as “a resounding victory for Ripple, for crypto, every way you look at it.”
“Ripple is the first company with the resources, determination, and grit to fight back against the agency’s overreach, and today, this journey finally concludes,” Garlinghouse said in a video on his social media post. “Today is a victory and a long-overdue surrender by the SEC.”
He called out the SEC, under the direction of former chairman Gary Gensler, claiming, “They weren’t out to protect investors; they were out to intimidate and terrorize. The regulator, whose primary purpose is to protect investors, went all in on a non-fraud, victimless lawsuit and wiped out $15 billion of value from innocent XRP holders. The SEC was the market manipulator.”
“… We won, then, on every critical legal point, proving that the digital asset XRP is not a security. That is now the law, and those wins have laid the groundwork for policymakers to adopt a set of rules for crypto that are in line with nearly a century of securities law,” Garlinghouse continued.
“It’s time to make the U.S. the crypto capital of the world. Thankfully, we have new leadership in executive and legislative branches of our government. That leadership is actively seeking a rational and constructive way forward on crypto. Let’s make the most of this,” Garlinghouse added.
He concluded his video by thanking all those who stood by Ripple during its legal battle, including the employees, the legal team, and the “XRP family.”
“To our customers, to our partners: Thank you. We couldn’t have won this battle without all of you being behind us and working together. … This was a fight Ripple never wanted, but one we knew we had to win. And today, emphatically, we have. ”
The price of XRP rose more than 13% Wednesday morning following news of the end of the lawsuit.
The SEC has not yet publicly commented on its decision to drop the appeal.