What’s Happening With XRP? SEC Drops Ripple Case

What’s happening with XRP? Let’s find out.

After a lengthy legal battle that seemed never-ending, the Securities and Exchange Commission (SEC) has officially dropped its case against Ripple. This decision marks a turning point not only for Ripple but also for the entire cryptocurrency industry. 

The legal saga has profoundly impacted XRP’s price, investor confidence, and the regulatory landscape surrounding digital assets. Ripple’s legal victory culminates years of complex arguments, shifting strategies, and an unpredictable market. With the SEC case behind them, Ripple can now focus on growth and expansion. 

Should we call this historic moment a victory for XRP, or is there more to this story? Let’s break down the events, the implications, and what’s next for Ripple and its community.

Key Takeaways

• The SEC’s decision to drop the case against Ripple has positively impacted XRP’s market value, boosting investor confidence.

• XRP’s price surged following the lawsuit dismissal, with analysts predicting further gains, including a potential $3.50 peak in 2025.

• Ripple’s focus on developing RLUSD, a stablecoin backed by U.S. dollar reserves, positions it to capture a larger share of the B2B payments market.

• The growing interest in XRP-focused ETFs from multiple investment firms highlights increased institutional demand for the cryptocurrency.

• Ripple’s legal victory signals a potential shift in how cryptocurrencies are regulated, setting a precedent for future cases and regulatory clarity in the U.S.

Overview of Ripple (XRP)

Ripple is a broader payment protocol and real-time gross settlement system designed to facilitate fast, low-cost international money transfers. XRP serves as its native digital asset. Unlike many cryptocurrencies that primarily function as decentralized alternatives to fiat money, Ripple focuses on improving cross-border payments for banks and financial institutions. 

Its core technology, the RippleNet network, uses a consensus ledger and unique node list to validate transactions, offering near-instant finality without the high fees or energy demands associated with traditional proof-of-work systems like Bitcoin.

Ripple’s technology allows institutions to move money globally using a standardized protocol, while XRP can be used as a bridge currency to improve liquidity between different fiat currencies. This reduces the need for pre-funded nostro accounts and cuts settlement times from days to seconds. 

Ripple also supports interoperability with blockchain-based and traditional financial infrastructures, positioning itself as a complementary solution rather than a competitor to existing banking systems. 

This combination of enterprise focus, real-world utility, and efficient infrastructure sets Ripple apart from most crypto projects that rely primarily on speculation or decentralized finance use cases.

The Ripple and SEC Lawsuit: A Long Battle

Source: Freepik

The legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has been one of the most significant and prolonged in the cryptocurrency industry. 

It began in December 2020 when the SEC filed a lawsuit against Ripple, claiming that the company had conducted an unregistered securities offering by selling XRP, its native cryptocurrency. 

This case not only raised questions about the regulatory classification of digital assets but also set a precedent for how U.S. regulators could treat cryptocurrencies.

A Timeline of the Ripple vs. SEC Lawsuit

The Ripple-SEC legal saga unfolded over several years, with key events shaping its course:

• December 2020: The SEC Files the Lawsuit The SEC sued Ripple Labs and two of its executives, Brad Garlinghouse (CEO) and Chris Larsen (co-founder), accusing them of conducting an unregistered securities offering by selling XRP. 

According to the SEC, XRP was considered a security, so its sale violated U.S. securities laws. The lawsuit sent shockwaves through the cryptocurrency world, particularly for XRP holders and the broader crypto community.

• Early 2021: Ripple responds and denies allegations. Ripple vehemently rejected the SEC’s accusations, arguing that XRP should not be classified as a security. The company claimed that the SEC’s decision was arbitrary and lacked clarity regarding regulating digital assets. 

Ripple also argued that the SEC failed to provide clear guidelines for treating cryptocurrencies under securities law. The company’s defense relied heavily on the idea that XRP was a digital currency and, like Bitcoin or Ethereum, it should not be subject to the same regulatory scrutiny as traditional securities.

• Mid 2021: Court rulings and tensions escalated. As the case progressed, Ripple’s legal team began to gain some traction. In the summer of 2021, the court ruled that the SEC had to hand over internal documents related to its prior communications about Bitcoin and Ethereum’s status.
  
  Ripple argued that the SEC had treated Bitcoin and Ethereum differently than XRP, which played a critical role in shaping the defense. These court victories gave Ripple supporters hope that the case could go in their favor.
• 2022: Discovery and legal maneuvering continued throughout 2022. Ripple and the SEC engaged in extensive discovery procedures. Ripple sought more information regarding the SEC’s prior decisions on the regulatory status of other cryptocurrencies. 
  
  Ripple’s legal team aimed to show that the SEC had inconsistently applied the law. The legal back-and-forth continued as Ripple’s team sought to discredit the SEC’s claims. At the same time, the SEC pushed forward, arguing that Ripple’s actions in selling XRP directly to institutional investors could lead to regulatory violations.
• 2023: Partial wins and ongoing legal battle in 2023, Ripple saw partial victories in the form of rulings that provided some clarity on certain aspects of the case, particularly concerning the SEC’s position on XRP’s sale. 

However, the case was far from over, and while both sides continued their legal tactics, it was clear that the battle would have wide-reaching consequences for how the U.S. regulates cryptocurrencies.

The Main Legal Arguments of the SEC Against Ripple

The SEC’s case against Ripple centered on the argument that XRP was a security under U.S. law, specifically the Howey Test, which determines whether an asset is considered a security. 

According to the SEC, XRP met the criteria of an investment contract, which means it should have been registered as a security before being sold to investors.

Key arguments from the SEC included:

XRP as an Investment Contract

The SEC argued that XRP holders were investing in the asset with the expectation of profits primarily driven by Ripple’s efforts. 

The commission relied on the Howey Test, which states that a security exists when money is invested in a common enterprise with the expectation of profits derived from the efforts of others. The SEC contended that XRP fit these criteria, making it a security.

Unregistered Securities Offering

The SEC maintained that Ripple’s sale of XRP was unregistered, meaning Ripple failed to comply with securities laws when it sold XRP to institutional and retail investors. This, according to the SEC, violated the Securities Act of 1933, which mandates the registration of securities offerings unless an exemption applies.

Market Manipulation

The SEC also accused Ripple of manipulating the market by creating artificial demand for XRP. The commission suggested that Ripple’s actions influenced XRP’s price, allowing it to raise funds without properly informing investors about the asset’s regulatory status.

Ripple’s Defense and Why It Was So Controversial

Ripple’s defense was built around the argument that XRP was not a security but a digital currency like Bitcoin or Ethereum, which had not been classified as securities by the SEC. Ripple’s team raised several points to support their case:

XRP as a Currency, Not a Security

Ripple argued that XRP was a utility token, designed for use within the Ripple payment network, and should be treated like any other currency. Ripple emphasized that XRP had real-world utility, including its role in cross-border payments, which did not depend on the company’s efforts to generate profits for investors.

Lack of Clear Regulatory Guidelines

Ripple claimed that the SEC had failed to provide clear guidelines regarding how digital assets should be regulated. Ripple argued that the lack of clarity around the regulation of cryptocurrencies meant that it was unreasonable for the SEC to suddenly categorize XRP as a security, especially when other digital assets had not been treated in the same way.

Selective Enforcement by the SEC

Ripple also accused the SEC of selective enforcement, noting that the agency had not taken similar actions against Bitcoin or Ethereum. Ripple’s legal team argued that by treating XRP differently, the SEC was acting inconsistently and unfairly. This selective enforcement became one of the central points in Ripple’s defense.

The “Fair Notice” Argument

Ripple’s defense team invoked the “fair notice” argument, which posits that the SEC had not clearly communicated to Ripple that its conduct was unlawful. They argued that without clear guidance from the SEC, Ripple could not have reasonably known that it was violating securities laws.

Brad Garlinghouse Confirms the News: SEC Drops the Case

Ripple CEO Brad Garlinghouse has officially confirmed that the U.S. Securities and Exchange Commission (SEC) is dropping its case against the company. 

This announcement ends a legal dispute that has lasted over four years, shaping the regulatory debate surrounding XRP and the broader cryptocurrency market.

Garlinghouse took to X (formerly Twitter) to share the news with the crypto community:

“This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it. The future is bright. Let’s build.”

This statement signals confidence for Ripple and the industry as a whole. The lawsuit began in December 2020 and accused Ripple of selling $1.3 billion worth of XRP as an unregistered security. 

However, Ripple fought back, arguing that XRP is not a security and that the SEC’s actions lacked clarity. 

In March 2025, after facing repeated setbacks, the SEC officially dropped its appeal, effectively ending the case. This decision allows Ripple to focus on its expansion, partnerships, and further development of blockchain-based financial solutions.

XRP’s Wild Price Ride Before and After the Lawsuit

​XRP, the native cryptocurrency of Ripple Labs, has experienced significant price fluctuations influenced by legal developments and market reactions.​

Price Movement Before the Lawsuit

In December 2020, XRP was trading at approximately $0.60, with a market capitalization of $27 billion.

 However, on December 21, 2020, news broke that the U.S. Securities and Exchange Commission (SEC) intended to file a lawsuit against Ripple Labs, alleging that XRP was an unregistered security. 

This announcement led to a sharp decline in XRP’s price, dropping to $0.50 by the following day. ​

Price Fluctuations During the Lawsuit

The SEC’s lawsuit had a profound impact on XRP’s market performance. By December 29, 2020, XRP’s market capitalization had fallen by 63%, equating to a loss of $16 billion. 

This decline was exacerbated by several cryptocurrency exchanges suspending or delisting XRP trading. For instance, Coinbase announced on December 28, 2020, that it would suspend XRP trading for U.S. customers starting January 19, 2021. ​

Throughout the lawsuit, XRP’s price remained volatile, reflecting the uncertainty surrounding its regulatory status. Periodic developments in the case led to short-term price movements, but the overall trend during this period was marked by caution among investors.​

Price Reaction After the Lawsuit Was Dropped

In March 2025, Ripple CEO Brad Garlinghouse announced that the SEC had dropped its case against the company. This news prompted an immediate positive reaction in the market. XRP’s price experienced a 10% surge following the announcement, reflecting renewed investor confidence.

However, the rally was short-lived. On March 21, 2025, XRP’s price had slipped by 2.4% to $2.39, just 3% above its pre-announcement level. 

This suggests that while the lawsuit’s conclusion removed a significant overhang, investors may have already priced in the likelihood of this outcome, especially considering the broader regulatory environment and recent political developments. ​

What’s Next for Ripple and XRP?

Source: Freepik

​With the SEC’s lawsuit against Ripple now concluded, both Ripple and its native cryptocurrency, XRP, are poised for significant developments in the near future.​

Short-Term Outlook for Ripple and XRP

Following the announcement of the lawsuit’s dismissal, XRP experienced a brief surge, reaching $2.56, before stabilizing around $2.39. Analysts have set optimistic short-term price targets for XRP, with projections suggesting potential peaks of $3.50 by the end of 2025. 

Additionally, the anticipation of an XRP exchange-traded fund (ETF) approval could further bolster institutional interest and positively impact XRP’s market value. ​

Potential Next Steps for Ripple’s Global Expansion and Adoption

Ripple has outlined ambitious plans to enhance its global presence and drive broader adoption of its payment solutions:​

Stablecoin Development

The company introduced RLUSD, a stablecoin fully backed by U.S. dollar reserves, aiming to position it as a preferred solution for B2B international payments. ​

Blockonomi

ETF Initiatives

The race for an XRP-focused ETF is intensifying, with at least seven major investment firms filing for approval. 

Bitwise Asset Management, Franklin Templeton, and 21Shares are among those seeking regulatory clearance, while WisdomTree, Canary Capital, and Grayscale Investments are also making strategic moves, particularly aiming to convert their existing XRP trusts into an ETF structure.

Volatility Shares has taken a more aggressive approach, submitting applications for three distinct XRP ETFs, including a spot fund, a leveraged product, and an inverse ETF. 

Optimism surrounding these filings has surged, especially after the SEC signaled a shift in its stance on crypto investment products. Prediction markets reflect an 82% likelihood of XRP ETF approval in 2025, marking a 10% increase in the past week.

Further bolstering the case for an XRP ETF, the U.S. government has hinted at potential XRP integration into its “Digital Asset Stockpile” initiative, as suggested by Trump’s recent comments on the growing role of digital assets. 

While final approval timelines remain uncertain, the momentum behind XRP ETFs is rapidly building, with regulatory clarity paving the way for broader institutional adoption.

Strategic Partnerships

Ripple continues to forge alliances with financial institutions worldwide to integrate its payment solutions, thereby enhancing the efficiency and speed of cross-border transactions.

The Ripple Case’s Impact on the Crypto Industry

​The conclusion of the SEC’s lawsuit against Ripple Labs has significant implications for the cryptocurrency industry, influencing ongoing and future legal proceedings, regulatory frameworks, and the evolution of decentralized finance (DeFi).​

Influence on Other Crypto Lawsuits

The SEC’s decision to drop its case against Ripple, as announced by CEO Brad Garlinghouse, sets a notable precedent that could impact other cryptocurrency-related lawsuits. 

This outcome may encourage companies facing similar legal challenges to contest allegations, potentially leading to a reevaluation of existing cases and a more cautious approach by regulatory bodies in pursuing future actions. ​

Impact on Other Cryptocurrencies and Projects

The resolution of the Ripple case has had immediate market effects, with XRP experiencing a significant price surge. 

This development has bolstered investor confidence in XRP and other digital assets, suggesting a potential shift toward more favorable regulatory treatment. 

Projects previously hesitant due to regulatory uncertainties may now proceed with greater assurance, fostering innovation and growth within the crypto space. ​

Implications for U.S. and Global Crypto Regulations

The dismissal of the Ripple case reflects a broader trend toward regulatory clarity in the cryptocurrency industry. 

Under the current administration, there is a concerted effort to establish a more accommodating legal framework for digital assets, positioning the U.S. as a leader in the crypto sector. 

This shift is expected to influence global regulatory standards, prompting other nations to reassess and potentially liberalize their approaches to cryptocurrency oversight. ​

Rise of Decentralized Finance (DeFi) and Regulatory Clarity

The outcome of the Ripple case may also accelerate the adoption and development of decentralized finance (DeFi) platforms. 

With increased regulatory clarity, DeFi projects can operate with greater legitimacy and security, attracting more users and institutional investors. This environment encourages innovation while ensuring compliance, contributing to the maturation and integration of DeFi into the broader financial system.

Final Thoughts

The SEC’s decision to drop its case against Ripple marks a defining moment for XRP and the broader crypto industry. With legal uncertainty fading, Ripple is pushing forward with expansion plans, strategic partnerships, and potential ETF approvals. 

Investors and institutions are closely watching XRP’s market movements, while regulators reassess their approach to digital assets. 

As XRP stabilizes and Ripple advances its global initiatives, the focus now shifts to long-term adoption and regulatory developments. This chapter may be closing, but XRP’s journey is far from over.

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