SEC Drops Ripple Lawsuit, XRP Surges 10%

The Securities and Exchange Commission's (SEC) recent decision to drop its legal battle against Ripple Labs marks a significant milestone for XRP and the broader cryptocurrency industry. After years of legal contention, the withdrawal of the lawsuit signals a potential shift in regulatory stances on digital assets in the U.S. This decision reinforces Ripple’s long-standing position that XRP is not a security, as emphasized by Ripple CEO Brad Garlinghouse, who highlighted the positive implications for the crypto market.

The legal saga began in December 2020 when the SEC accused Ripple Labs of conducting unregistered securities offerings through its $1.4 billion sales of XRP. This case became a landmark moment in the cryptocurrency sector, sparking significant discussions about the classification and regulatory treatment of digital assets. Ripple’s defense argued that XRP should be treated similarly to non-security cryptocurrencies like Bitcoin and Ethereum, setting the stage for ongoing debates about regulatory clarity.

In July 2023, a federal judge ruled that XRP transactions on public exchanges do not constitute securities sales. However, it was specified that institutional sales of XRP remain under the purview of securities regulations. Ripple celebrated a partial judicial victory but faced a looming $125 million fine, which was put on hold pending appeal. On March 19, 2025, Garlinghouse confirmed that the SEC had officially withdrawn its appeal, concluding a lengthy and contentious legal journey for the company.

The SEC’s withdrawal has sparked discussions about potential political influences in regulatory decisions. Garlinghouse’s documented ties to Donald Trump, including attendance at a White House crypto summit, and Ripple’s $5 million contribution to Trump’s inaugural committee have become focal points in evaluating the motives behind the SEC’s decision. While the SEC has not publicly clarified its motivations, the incident aligns with a noticeable shift in how the agency approaches cryptocurrency enforcement under the current administration. This trend includes a decrease in aggressive legal actions against industry players.

In response to the SEC’s announcement, XRP experienced a notable rise, climbing over 10% to reach $2.50. This surge illustrates the restored confidence in Ripple and reveals broader implications for market dynamics. The ruling provides essential regulatory clarity for Ripple, potentially setting a pivotal precedent for subsequent cryptocurrency litigation. However, industry analysts recommend caution, asserting that although this particular legal battle has been resolved, comprehensive regulatory discussions concerning digital assets remain ongoing. The SEC’s embrace of a more lenient approach may provide cryptocurrency firms with valuable space to innovate and grow within the U.S. landscape.

The SEC’s decision to retract its lawsuit against Ripple Labs not only signifies a major triumph for the company but also encapsulates the evolving regulatory landscape of cryptocurrencies in the United States. With renewed investor confidence and potential shifts in regulatory approaches, the future looks promising for Ripple and other players in the cryptocurrency market, even as broader regulatory dialogues continue to evolve.