XRP News Today: Ripple Drops Appeal Clearing Path for XRP ETF

Ripple, the blockchain-based payment protocol, has made a significant move in its long-standing legal battle with the Securities and Exchange Commission (SEC). The company has decided to drop its appeal in the case, a decision that has cleared the path for a potential spot XRP exchange-traded fund (ETF). This development comes after years of legal disputes, with the SEC initially alleging that Ripple had sold XRP as an unregistered security.

The decision to drop the appeal was confirmed by Ripple's Chief Legal Officer, Stuart Alderoty, who emphasized that the legal status of XRP as not a security remains unchanged. This move is seen as a strategic decision to close the chapter on the legal battle and focus on the future prospects of XRP. The resolution of the case has also sparked renewed investor confidence and speculation about the potential for an XRP ETF and even an initial public offering (IPO) for Ripple.

The legal battle between Ripple and the SEC has been a contentious one, with both parties initially seeking to lower a civil penalty and alter an injunction imposed against Ripple. However, U.S. District Judge Analisa Torres denied a proposal from both parties to cut a $125 million penalty or remove restrictions on Ripple’s ability to sell XRP. Torres cited a “compelling case” built by the SEC over four years, which alleged that Ripple offered and sold XRP to investors as an unregistered security. Despite Ripple's programmatic sales of XRP not being in violation of the law, Torres found that Ripple’s sales to institutions were, warranting a “substantially reduced” fine.

The denial of the proposal by Judge Torres highlights the lasting impact of the SEC's actions under former Chair Gary Gensler, despite efforts to walk back what critics say was regulation by enforcement. The lawsuit was first initiated under then-SEC chair Jay Clayton, a Trump nominee. Torres noted that the SEC has dismissed other crypto cases “before a court found a violation of federal securities laws,” making its case against Ripple relatively distinct.

The resolution of the case has significant implications for the cryptocurrency industry. Nate Geraci, President of THE ETF Store, noted that Ripple's resolution with the SEC has paved the way for a spot XRP ETF, enabling participation from major financial institutions like BlackRock. This development could potentially open up new investment opportunities and increase the mainstream adoption of XRP.

Over nine asset managers have so far filed for XRP ETF products in the US, including major issuers like Bitwise, ProShares, 21Shares, and Franklin Templeton. Despite the growing XRP ETF filing frenzy, BlackRock — issuer of the largest spot Bitcoin ETF — has yet to submit paperwork for an XRP-based investment vehicle. Geraci believes that with no regulatory obstacles in sight, BlackRock could soon apply with the SEC to introduce an ETF tied to the industry’s fourth-largest crypto by market cap.