Main Points:
- Appeal Withdrawal: Ripple has decided to drop its opposing appeal in the long-running SEC lawsuit, potentially marking the final legal resolution in the case.
- Partial Refund Under Court Ruling: Following a district court ruling that ordered a $125 million payment, the SEC will retain $50 million while the remaining $75 million is expected to be returned to Ripple.
- Legal and Regulatory Implications: This move sets the stage for the SEC to seek the lifting of a standard injunction, pending routine court procedures, and signals a significant step towards regulatory clarity for Ripple.
- Political and Market Context: Despite Ripple’s past political involvement and significant crypto contributions, Ripple’s CLO Stuart Alderoty emphasizes that these developments are separate from political donations.
Introduction
In a major development for Ripple, the company’s Chief Legal Officer, Stuart Alderoty, announced on X (formerly Twitter) on March 25 that Ripple intends to drop its opposing appeal in its long-running lawsuit with the U.S. Securities and Exchange Commission (SEC). This decision appears to pave the way for a final resolution of the case, based on a district court ruling that originally ordered Ripple to pay $125 million. Under the forthcoming agreement, the SEC will retain $50 million of that amount, with the remaining $75 million expected to be returned to Ripple.
1. Ripple’s Legal Strategy
Dropping the Opposing Appeal
Stuart Alderoty stated that this will likely be the last update regarding the SEC lawsuit, as Ripple is set to withdraw its opposing appeal in the U.S. Second Circuit Court of Appeals. This step effectively aligns Ripple with the district court’s decision from August 2024, which imposed the $125 million payment order.
Expected Outcome
Following the withdrawal, the SEC is anticipated to request the lifting of its previously imposed standard injunction. Once both parties complete the necessary court procedures—such as committee votes and final document submissions—the decision is expected to confirm that the SEC retains only $50 million, with the balance being returned to Ripple. Alderoty highlighted that these steps are contingent on standard judicial processes and ultimately aim to resolve one of the longest-running crypto regulatory cases in U.S. history.
2. Background of the SEC Lawsuit
A Prolonged Legal Battle
The SEC filed its lawsuit against Ripple Labs in December 2020 under the previous administration, making it one of the longest legal battles in the crypto space. Ripple’s legal strategies have evolved over time, and the recent decision to withdraw the opposing appeal reflects a shift towards finality in this protracted dispute.
Political Dimensions
Although Ripple has been actively involved in political activities—such as donating XRP to political funds and supporting crypto-friendly candidates—the company maintains that its legal decisions remain separate from its political contributions. Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty have previously indicated that, without the current contentious political climate, the legal landscape might have been different.
3. Implications for Ripple and the Crypto Market
Financial Impact
The partial refund of $75 million is expected to significantly ease Ripple’s financial burdens. By retaining only $50 million, the SEC’s limited hold on Ripple’s assets may allow the company to refocus on its core business of driving innovation in international remittances.
Regulatory Clarity
This resolution may also serve as an important step towards broader regulatory clarity in the crypto sector. With the lawsuit nearing its conclusion, Ripple’s legal triumph could set a precedent for future cases and signal a more balanced regulatory environment.
Market Reaction
The resolution of the SEC lawsuit, coupled with the return of funds, could positively impact Ripple’s market sentiment and XRP’s price. Investors have long viewed the lawsuit as a major impediment, and its resolution may open the door for renewed growth and broader adoption of Ripple’s technologies.
Ripple’s decision to drop its opposing appeal in the SEC lawsuit represents a potential turning point in one of the most significant legal battles in the cryptocurrency industry. With the district court ruling largely upheld and a partial refund of funds expected, Ripple is moving closer to a final resolution. This development not only reduces financial and legal uncertainties for Ripple but also may help pave the way for improved regulatory clarity in the broader crypto market. As both parties proceed through the remaining judicial processes, investors and market participants will be watching closely for the final outcome and its implications for the future of digital asset regulation.
