The SEC case against Ripple is reaching a decisive turning point

After more than four years of legal confrontation, the U.S. Securities and Exchange Commission (SEC) appears ready to close this emblematic case.

The case that the SEC brought against Ripple is reaching a decisive turning point. After more than four years of legal confrontation, the U.S. Securities and Exchange Commission (SEC) appears ready to close this emblematic case.

This trial, which began in December 2020 with the accusations of the SEC against Ripple Labs for illegally raising funds by selling XRP as an unregistered security, has taken on significant proportions due to the regulatory uncertainty surrounding the crypto industry. After several years of proceedings and twists of fate, a ruling in August 2024 marked a decisive turning point. A court ruled that programmatic sales of XRP on exchanges did not constitute an offer of financial securities, and also fined Ripple $125 million.

However, both parties, having been granted the right to appeal, decided to do so. But on March 12, journalist Eleanor Terrett from Fox Business reports on X (formerly Twitter) that the case between the SEC and Ripple is “being dropped” after both parties filed an appeal and a counter-appeal regarding the $125 million judgment rendered in August 2024.

Both Ripple and the SEC have contested this verdict, leading to a series of appeals and counter-appeals. Pointing out that the case is now “much further along than other actions abandoned by the SEC,” Stuart Alderoty, Chief Legal Officer at Ripple, adds that Ripple is “optimistic about a quick resolution.” If both parties drop their appeals, the initial ruling will stand. But in case of disagreement over the fine, Ripple and the SEC will have to return to a judge for potential renegotiation.

A decision at the cost of several donations

If the end of this trial will bring relief to Ripple and its investors, it also raises questions about the timing and the true motivations of the SEC. For several months now, the U.S. regulator has been dropping several lawsuits against major players in the crypto space. After Coinbase, Kraken, and Consensys, this time it's the turn of the SEC to close the case it brought against Ripple in 2020.

This surprising turn of events comes amid fierce political debate in the U.S. about the regulation of digital assets. After years of relative inertia, the SEC, under the Trump administration, appears to be shifting gears.

One element fueling this controversy: the financial ties between Ripple and some Republican political groups. Indeed, Ripple contributed $45 million to Fairshake, an influential political action committee in the last U.S. elections, and donated $5 million for Trump’s presidential inauguration. Some observers see this as a potential conflict of interest, especially given that other crypto companies that backed Trump, like Coinbase, have also seen their matters stall.

However, Stuart Alderoty maintains that the SEC’s decision is independent of any political pressure and reflects a change in perspective on the crypto industry. He stated, “We are grateful to Magistrate Judge Robert Smith for his careful consideration of the issues in this case. We are also appreciative of the SEC’s willingness to work towards a resolution of this matter. We believe that this case is a positive development for the cryptocurrency industry as a whole.”

Crucial months for the crypto industry

The coming months will be crucial for the crypto industry. If the SEC reduces its regulatory aggressiveness, it could encourage more businesses to establish in the United States, rather than operate in a legal gray area. Conversely, if the agreement between Ripple and the SEC includes major concessions, it could set a precedent for other upcoming trials. In any case, this case represents a change in the relationship between U.S. regulators and the crypto ecosystem, and could reshape the contours of regulation in the years to come.