Ripple vs SEC: XRP Could Be Recognized as Commodity, Fines Reduced

Andrew Parish, co-founder of arch Public, has suggested that the U.S. Securities and Exchange Commission (SEC) lawsuit against Ripple is approaching its resolution. Parish, who claims to have received information from two sources familiar with the case, indicated that significant developments are underway. His statement has drawn the attention of legal and crypto experts, particularly given his history of skepticism toward XRP. Prominent attorneys, including John Deaton and Fred Rispoli, have responded to his remarks, acknowledging the potential impact of the lawsuit’s conclusion.

Parish outlined three key outcomes that could result from the case’s resolution. If these predictions hold, they may significantly influence both XRP’s regulatory classification and the broader cryptocurrency industry. One major development Parish anticipates is the potential recognition of XRP as a commodity. This would mark a significant departure from the SEC’s original stance. In December 2020, the SEC sued Ripple, arguing that XRP was a security and that Ripple had violated federal securities laws by selling it without proper registration. However, a landmark ruling in 2023 determined that XRP itself is not a security. The SEC did not challenge this classification when it appealed certain aspects of the case, suggesting a shift in regulatory perspectives. If XRP is officially recognized as a commodity, it could provide more clarity on how the asset will be regulated moving forward.

Parish also predicted that Ripple might not be required to pay the full financial penalty imposed by the court. In August 2024, Judge Analisa Torres ruled that Ripple had violated securities laws in its institutional XRP sales, imposing a $125 million fine along with a permanent injunction. According to Parish, ongoing negotiations could lead to a significantly reduced penalty, easing the financial burden on Ripple. However, no official confirmation has been provided regarding these discussions.

A third potential outcome involves the broader implications for future crypto-related litigation. Parish suggested that the SEC’s handling of the Ripple case under its new leadership could set a precedent for how similar cases are resolved. Given the evolving regulatory environment, a settlement or resolution in favor of Ripple may influence how the SEC approaches enforcement actions against other crypto firms in the future. This aspect of the case is being closely watched by legal experts and industry participants.

Parish’s statement has prompted reactions from leading legal experts in the community. Attorney John Deaton responded to his claim by posting an eye emoji, signaling its importance to the broader XRP community. Attorney Fred Rispoli also weighed in, stating that while Parish has historically been critical of the asset, he tends to take his reports seriously when they lean positive. Rispoli suggested that Parish’s acknowledgment of a favorable outcome for XRP lends credibility to the claim, given his past skepticism.

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Reports from other industry sources also suggest that the case is moving toward resolution. As reported last week, Eleanor Terrett, host of Crypto America, noted that the main factor delaying the settlement has been Ripple’s efforts to remove the permanent injunction imposed by the court. Terrett explained that Ripple is pushing for the SEC to drop the injunction entirely, arguing that recent dismissals of other crypto-related lawsuits indicate a shift in regulatory enforcement. However, despite ongoing speculation, neither Ripple nor the SEC has made any official announcements regarding a final settlement.

As developments unfold, the conclusion of this lawsuit could have significant implications not only for Ripple and XRP but for the broader cryptocurrency industry. The potential recognition of XRP as a commodity, a reduction in financial penalties, and the establishment of legal precedents for future crypto cases are all critical factors that could shape the regulatory landscape for digital assets. The legal community and industry participants are closely monitoring these developments, anticipating the impact on the broader cryptocurrency market.