SEC to Drop Appeal Against Ripple, CEO Brad Garlinghouse Confirms

Ripple Labs CEO Brad Garlinghouse Announces End of SEC Lawsuit

According to Ripple Labs CEO Brad Garlinghouse, the Securities and Exchange Commission (SEC) will drop its appeal in the lawsuit it has been pursuing against the company for the past four years. In a video shared to his X account on Wednesday, Garlinghouse announced that the case has come to an end.

Partial Ruling in Favor of Ripple

Ripple, which uses XRP Ledger and the XRP cryptocurrency, received a partial ruling in its favor in 2023. However, the SEC filed an appeal seeking to have that decision overturned.

Federal New York Judge’s Ruling

A federal New York judge found that Ripple’s “programmatic sales” of XRP on a secondary market did not constitute securities transactions, while those made to institutional investors did.

To be clear, the SEC has not yet made an announcement that it will drop its appeal. At the time of writing, the XRP price has climbed as high as 14% to $2.55, according to CoinGecko data.

Ripple’s Position Confirmed

A Ripple spokesperson confirmed to Decrypt that the SEC’s decision is “subject to Commission vote and approval.” It may take “several weeks” for the case to be officially withdrawn, as the timeline is completely in the SEC’s control.

SEC’s Response

The SEC declined to comment when asked for details about the Ripple lawsuit by Decrypt.

A Federal New York Court Order

A federal New York court ordered Ripple to pay a $125 million fine for XRP sales to institutions in August. The penalty was far below the agency’s $2 billion request, and it’s unclear how the SEC dropping its appeal could impact the decision in the Southern District of New York.

SEC’s Legal About-Face

The SEC’s legal about-face was widely expected. Since SEC Acting Chair Mark Uyeda took over, the regulator has retreated from several enforcement actions, including its cases against the crypto exchanges Coinbase and Kraken.

Future Implications

If the SEC had been successful in its Ripple case, it could have had wide-reaching implications on which cryptocurrencies should be classified as securities versus commodities.

Ripple’s Legal Strategy

Ripple Labs Chief Legal Officer Stuart Alderoty told Decrypt in October that the SEC’s appeal “will backfire.” While he believed the Second Circuit Court of Appeals would grant a favorable decision for the firm, he also noted that the SEC “can withdraw their appeal anytime they want.”

Conclusion

The end of the SEC’s appeal against Ripple marks a significant victory for the company, and its CEO, Brad Garlinghouse. The outcome could have far-reaching implications for the cryptocurrency market and the regulatory landscape surrounding it.

FAQs

Q: What is the current status of the SEC’s appeal against Ripple?

A: According to Ripple CEO Brad Garlinghouse, the SEC will drop its appeal.

Q: What is the significance of the SEC’s decision?

A: The decision could have wide-reaching implications on the classification of cryptocurrencies as securities versus commodities.

Q: Will the SEC’s decision impact the outcome of the Southern District of New York court case?

A: The impact is unclear, as the SEC’s decision is subject to Commission vote and approval.

Q: What is the current price of XRP?

A: As of the time of writing, the XRP price has climbed as high as 14% to $2.55, according to CoinGecko data.