SEC Ends Ripple Case, Marking Shift in Crypto Regulation

The U.S. Securities and Exchange Commission (SEC) has officially concluded its legal proceedings against Ripple, marking the end of a four-year court battle over the classification of XRP. This decision was announced by Ripple CEO Brad Garlinghouse on Wednesday, who described the outcome as a significant victory for Ripple and the broader cryptocurrency sector.

Garlinghouse characterized the 2020 lawsuit as the beginning of a broader regulatory crackdown on the cryptocurrency industry. He referred to the SEC’s decision to drop the case as “a long overdue surrender,” highlighting the regulatory body’s enforcement-driven approach to crypto regulation. Throughout the legal battle, Ripple maintained that XRP is not a security and criticized the SEC’s tactics, claiming that the regulator’s actions wiped out billions of dollars in value for XRP holders while pursuing a non-fraud case.

“This was lawfare, a war of legal terror,” Garlinghouse stated. “Fortunately, the judge rebuked the SEC multiple times in this journey.” He further asserted that the SEC was not seeking justice but rather aiming to win the case at any cost. The judge overseeing the case had previously sanctioned the agency for discovery abuses and criticized its handling of the law.

With the case now resolved, Garlinghouse suggested that Ripple’s outcome could set a precedent for broader regulatory clarity in the cryptocurrency sector. “These wins have laid the groundwork for policymakers to adopt a set of rules for crypto that are in line with nearly a century of securities law,” he said. Garlinghouse expressed gratitude to Ripple employees, legal teams, and XRP supporters, calling the conclusion a “turning point for the industry.”

The SEC’s decision to end the Ripple case signals a potential shift in its enforcement strategy, following recent lawsuits that have increased pressure on the agency to reconsider its approach to digital asset regulation. The outcomes of these cases have led to calls from Congress for legislation to clarify crypto regulations and define the SEC’s role. Industry representatives argue that enforcement actions under unclear rules could weaken market confidence and limit growth.

The SEC’s retreat could also indicate a shift towards greater regulatory cooperation and transparency, which would decrease the need for enforcement actions and foster a more favorable climate for the crypto sector. This outcome is expected to enhance institutional trust and motivate more investment in cryptocurrencies. The case’s verdict may also influence global regulatory organizations, potentially leading to standardized international standards for crypto supervision.