Ripple has taken a significant step forward in its long-standing legal battle with the U.S. Securities and Exchange Commission (SEC). The regulatory body has agreed to drop its appeal against the blockchain company. This move could mark the beginning of the end for the lawsuit that has cast uncertainty over Ripple’s operations in the United States.
Ripple CEO Brad Garlinghouse confirmed the development, noting that while the SEC’s decision still requires official approval, it signals a potential resolution to the multi-year dispute. The lawsuit, which has been ongoing since 2020, initially centered on whether XRP, Ripple’s native cryptocurrency, should be classified as a security.
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Ripple’s Cross-Appeal Remains in Question
Despite the SEC’s withdrawal, Ripple has yet to determine whether it will continue with its cross-appeal. Ripple Company had formerly sought to overturn selected parts of Judge Analisa Torres’ decision, including the $125 million fine for XRP institutional transactions.
Garlinghouse discussed with Bloomberg how some parts of the court ruling need additional explanations. Ripple’s chief executive stated that the fine imposed and the ongoing ban on institutional trading are still critical issues for the company. After Ripple initially weighed leaving the penalty behind, the regulatory environment under the present administration changed how the company approached its situation.
Additionally, the executive expressed that the SEC itself recognized flaws in the case, reinforcing the argument that the lawsuit should not have been initiated in the first place. Ripple evaluates its options for XRP management despite winning court recognition that XRP has become non-secure in secondary transactions.
Possible Settlement Could Reduce Fine
According to legal expert Fred Rispoli, the SEC’s move to drop its appeal without first demanding Ripple withdraw its cross-appeal was a surprise. The attorney speculated that the parties may have reached an undisclosed agreement, which could involve Ripple agreeing to drop its appeal in exchange for a reduction in the imposed fine.
Rispoli did not address whether the potential deal would lift the permanent injunction. However, Ripple’s CEO suggested that the company would welcome the opportunity to recover the $125 million, which remains in escrow.
The blockchain firm faces a pivotal decision, with the lawsuit nearing its conclusion. It must choose between finalizing an agreement with the SEC that could remove all remaining penalties or continuing its cross-appeal to contest the fine and other restrictions.
The SEC’s move to withdraw its challenge marks a significant shift in the case, but Ripple’s final course of action remains uncertain. Industry observers closely monitor the following steps, as any resolution could have broader implications for the regulatory treatment of digital assets in the United States.
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