XRP jumped 10% on Wednesday

XRP jumped 10% on Wednesday during U.S. morning hours as Ripple CEO Brad Garlinghouse said the U.S. Securities and Exchange Commission (SEC) is set to drop its appeal against Ripple

"This is it - the moment we’ve been waiting for. The SEC will drop its appeal," Garlinghouse said in a post on X, formerly Twitter, on Wednesday morning. "A resounding victory for Ripple, for crypto, every way you look at it."

Reports last week claimed that the long-standing legal battle between Ripple and the agency was nearing its end. The SEC filed a lawsuit against Ripple in 2020 - during President Donald Trump’s first term - alleging that the company raised $1.3 billion via unregistered securities sales of XRP tokens.

The case was widely followed by the crypto industry as it unfolded in 2023 with U.S. Judge Analisa Torres ruling that while Ripple did violate federal securities law with institutional sales, the programmatic sales of tokens to retail exchanges did not violate the laws, a ruling that many viewed as a partial victory for Ripple. The judge handed a $125 million fine against Ripple last August.

Following the decision, the SEC filed a "notice of appeal."

The SEC's lawsuit against the crypto company, which Garlinghouse described as the “first major shot fired in the war on crypto” had resulted in $15 billion in losses for holders of XRP. Cases by the SEC usually end quickly, making this lawsuit against Ripple a prominent action against the crypto industry. After the departure of former SEC Chair Gary Gensler, the Commission has dropped several cases, including its investigation into Coinbase.

While Trump nominated Paul Atkins to serve as the next chair, the Senate has not yet scheduled a hearing for his confirmation.

Ripple and its executives donated heavily during the 2024 election, including over $70 million to the Congress-focused Fairshake super PAC and over $5 million to Trump's inaugural fund.

The end of this lawsuit also increases chances for an XRP exchange-traded fund (ETF) to be approved by the SEC. Several potential issuers, including Grayscale, Bitwise and Franklin Templeton, have filed for such a fund in previous months with ETF experts at Bloomberg previously placing odds for an approval at 65-75% for the end of this year. XRP was among the assets Trump said would be part of a strategic U.S. crypto reserve.

See related: Value of Bitcoin, Ethereum, major cryptocurrencies surges despite SEC action

The case began in December 2020 when the SEC sued Ripple and its CEO, Garlinghouse, and co-founder, Greg Heller, alleging that they sold unregistered securities to raise $1.3 billion between 2019 and 2020. The agency also claimed that Ripple misled investors about the utility of XRP.

The SEC's complaint focused on three types of XRP sales: (1)

institutional sales, (2) programmatic sales to exchanges, and (3) sales to smaller, retail investors.

During the case, the SEC argued that all three types of sales constituted the sale of unregistered securities. However, Judge Torres ruled in July that only the institutional sales violated federal securities law. The judge also assigned a total of $125 million in penalties to Ripple for violating federal securities law with institutional sales of XRP.

The SEC appealed Judge Torres’s decision, arguing that the judge erred in applying the securities law to the facts of the case and in limiting the SEC’s ability to seek an injunction against further violations of federal securities law.