SEC Ends Ripple Lawsuit: What's Next for XRP?
SEC's Long Battle with Ripple Concludes
The U.S. Securities and Exchange Commission's (SEC) protracted legal battle with Ripple Labs has officially ended. Both parties have voluntarily dismissed their appeals in the Second Circuit Court of Appeals, according to a recent filing. This marks the closure of a lawsuit that began in 2020.
Each party will bear its own legal costs. The SEC initially sued Ripple under the leadership of former Chair Jay Clayton, alleging violations of securities laws through the sale of XRP.
Key Takeaways from the Dismissal
- End of Litigation: The dismissal concludes the long-running legal dispute.
- XRP Price Impact: XRP saw a 5% jump following the announcement, trading around $3.27.
- Appeal History: The SEC had appealed a previous ruling where a judge stated that Ripple’s XRP sales to retail traders via exchanges did not violate securities laws. Ripple also filed a cross-appeal to defend its position.
Background and Penalties
In June, Ripple CEO Brad Garlinghouse announced that both parties agreed to drop their appeals, accepting District Judge Analisa Torres’ penalties. These penalties stemmed from her finding that Ripple had violated securities laws through XRP sales to institutional investors. The penalties included $125 million in fines and a permanent injunction against further violations.
Earlier Settlement Attempts
Earlier in the year, after the US presidential election, both parties paused their appeals, and the SEC has since dropped several cases against other crypto companies. Negotiated settlements to reduce the original penalties faced setbacks, with multiple attempts rejected by Judge Torres due to procedural issues.
Implications for the Crypto Industry
The resolution of the SEC v. Ripple case provides a degree of regulatory clarity for the crypto industry. However, the implications of the original ruling continue to be debated and evaluated by experts. For projects navigating complex regulatory landscapes, platforms like Codeum offer resources and consulting services to ensure compliance and security in blockchain development. This includes smart contract audits, KYC/AML, and more.