Ripple’s XRP token experienced a notable 10% increase following the company’s announcement of a significant legal victory against the Securities and Exchange Commission (SEC) after a prolonged four-year battle.
Ripple’s CEO, Brad Garlinghouse, characterized the outcome as a “resounding victory,” indicating that the SEC will no longer pursue its appeal against the blockchain and crypto firm. This decision reflects a shifting perspective in Washington regarding the cryptocurrency industry, particularly since the advent of the Trump administration.
In 2020, the SEC initiated a lawsuit against Ripple, Garlinghouse, and co-founder Christian Larsen, alleging that they had raised over $1.3 billion through an unregistered and ongoing offering of digital asset securities. In a 2023 ruling, Ripple achieved a partial victory when a judge determined that the company did not violate federal securities laws by selling its XRP token on public exchanges and through algorithms. However, the ruling was not entirely favorable; U.S. District Judge Analisa Torres also found that the institutional sale of XRP constituted a violation of federal securities law.
As a result of this ruling, Ripple was ordered to pay a $125 million penalty last year. Despite the financial blow, Ripple interpreted the decision as a victory, as the SEC had initially sought $2 billion in penalties.
The SEC, acknowledging the changing landscape, decided to withdraw its “notice of appeal,” a move that Garlinghouse described as a long-overdue surrender by the agency. He criticized the SEC’s prior leadership under Chairman Gary Gensler, claiming that their efforts were less about investor protection and more about intimidation. “The regulator, intended to protect investors, ended up being the market manipulator, wiping out $15 billion in value for innocent XRP holders,” he asserted.
In a strategic move, Ripple had previously allocated $50 million to Fairshake, a super PAC supporting pro-crypto candidates in the upcoming 2024 U.S. elections. Garlinghouse expressed optimism about recent developments, stating, “Thankfully, we have new leadership in the executive and legislative branches actively seeking constructive solutions for the crypto space.”
Ripple is not alone in experiencing the benefits of this evolving regulatory environment. In recent weeks, under new leadership at the SEC, the agency has also opted to discontinue cases against other prominent firms, including Coinbase and Robinhood.
“This is an incredibly promising moment,” Garlinghouse remarked, urging for a united front within the industry and a move away from divisive practices.