Ripple's victory lap may be premature originally appeared on TheStreet .
Aug. 7, 2025 would be counted among the most glorious days in the history of the crypto industry as the years-long legal battle involving the crypto payments firm Ripple Labs and the Securities and Exchange Commission (SEC) finally came to an end.
Both the parties informed the Second Circuit Court of Appeals that they have dropped their appeals and cross-appeals of the landmark 2023 ruling in the case.
XRP was trading at $3.32 at press time, up more than 8.5% in 24 hours.
Let's unfold the iconic saga to get an overview of the most controversial legal case involving crypto assets.
End of a saga
It was during the first presidential term of Donald Trump that the SEC, under the leadership of Chair Jay Clayton, sued Ripple and two of its top executives, Brad Garlinghouse and Chris Larsen, in December 2020.
The securities regulator alleged the crypto firm engaged in the sale of unregistered XRP securities to raise over $1.3 billion. Ripple argued XRP is a digital currency, not a security.
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The case lingered for a few years until July 2023, when Judge Analisa Torres delivered a judgment that both parties claimed as a victory yet resented.
The judgment said that though Ripple's programmatic sale of XRP tokens to retail traders didn't constitute a sale of securities, the firm's sale of those tokens to institutional clients violated securities laws.
The SEC dropped its claims against Garlinghouse and Larsen in October 2023.
Next, the court issued another major ruling in August 2024, slapping Ripple with a civil penalty of more than $125 million — the SEC had asked for a $2 billion penalty — and asking it to desist from further violations of securities laws.
Consequently, both parties appealed the ruling — (i) Ripple hoping for a judgment that XRP is a digital currency, not a security at all, and even the institutional sale of XRP didn't violate any securities laws, and (ii) the SEC, now under Chair Gary Gensler, hoping for one that ruled the sale of XRP in both the scenarios to be violations of securities laws.
The above rulings were delivered during the Joe Biden administration.
But then, Trump returned to the White House in January 2025, and things began to take a 180 degree turn for Ripple and the broader crypto industry too.
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In March, the SEC and Ripple dropped their appeals and filed a joint settlement in May. Both parties repeatedly requested Judge Torres to slash the penalty from more than $125 million to $50 million and vacate the injunction against further securities violations.
Judge Torres has declined the request multiple times.
In conclusion, the 2023 ruling remains intact: (i) XRP isn't a security when sold to retail customer via programmatic sales, (ii) XRP is a security when sold to institutional clients to raise funds, and (iii) Ripple is still required to pay the penalty of over $125 million.
Regulatory status of XRP
As discussed above, the programmatic sale of XRP to retail traders over crypto exchanges isn't a violation of securities laws. But an institutional sale can only go ahead after registration with the SEC under securities laws.
The status is in line with the SEC's view during the Trump administration that most crypto assets aren't securities. However, there is one lone Democrat voice at the SEC who has consistently voiced her opposition to such views.
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Commissioner Caroline Crenshaw has raised concerns over the SEC's evolving view of crypto's regulatory status. While the regulator is declaring all sorts of crypto assets aren't securities, yet there is no objection to the exchange-traded funds (ETFs) linked to crypto assets effectively asserting that these assets actually are securities, she asked.
Crenshaw also objected to the settlement between the agency and Ripple for undermining the court order, the enforcement program, and the interests of the investors.
What it cost
CEO Brad Garlinghouse claimed in May 2023 that Ripple spent $200 million defending the case against the SEC. It's been more than two years since then, and the company must have spent much more by now.
The crypto firm also made political donations worth millions of dollars.
Ripple's chief legal officer Stuart Alderoty personally donated $300,000 in XRP to Trump's presidential campaign in June 2024.
On the other hand, co-founder Chris Larsen donated more than $11.8 million to PACs supporting the Democratic Party's presidential candidate Kamala Harris.
Once Trump won, Ripple Labs donated $5 million in XRP to his inaugural committee — one of the largest corporate donations to the fund.
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The company also donated millions of dollars to the Fairshake PAC that supports pro-crypto candidates.
In fact, Garlinghouse admitted in an interview in December 2024 that if it weren't for the SEC's aggressive campaign against crypto, the PAC wouldn't even have existed in the first place.
What now?
Once Trump began his second term, the SEC not only softened its stance in regard to Ripple but also to the entire crypto industry. The regulator dropped its similar lawsuits against exchanges such as Coinbase (Nasdaq: COIN), Kraken, etc.
The new SEC Chair Paul Atkins, appointed in April 2025, has vowed to enforce Trump's pro-crypto agenda. His view on most crypto assets not being securities isn't inconsistent with Judge Torres' 2023 ruling.
But what about the regulatory status of crypto assets during institutional sales?
But what about the regulatory status of crypto assets when they are tied to ETFs, as Commissioner Crenshaw pointed out?
We still can't say there is absolutely no ambiguity regarding the status of crypto assets in the U.S. We will closely observe the SEC's guidelines and the court rulings in the future, as Trump has vowed to turn the U.S. into the crypto capital of the world.
Ripple's victory lap may be premature first appeared on TheStreet on Aug 8, 2025
This story was originally reported by TheStreet on Aug 8, 2025, where it first appeared.
