The U.S. Securities and Exchange Commission (SEC) has ended its appeal against Ripple Labs Inc. This development stems from a court ruling in July 2023 by U.S. District Judge Analisa Torres, which determined that the XRP token sold by Ripple on public exchanges did not meet the legal definition of a security. The SEC had initially appealed this decision, but recent updates indicate the agency has withdrawn its appeal. The decision to drop the appeal marks a significant moment in the legal battle that began in December 2020, when the SEC accused Ripple of raising over $1.3 billion through an unregistered securities offering by selling XRP.
While the SEC achieved a partial victory with Torres ruling that $728 million in XRP sales to institutional investors violated securities laws—resulting in a $125 million fine for Ripple—the dropping of the appeal solidifies Ripple’s position regarding its public exchange sales. Ripple’s CEO, Brad Garlinghouse, described this as a “resounding victory” and a “long overdue surrender” by the SEC, reflecting a shift in the regulatory approach under new leadership since President Donald Trump’s second term began in January 2025.
The ruling that XRP sold on public exchanges is not a security establishes a precedent that not all cryptocurrencies are automatically subject to securities laws. This strengthens the argument that tokens with decentralized use cases or those primarily functioning as currencies (rather than investment contracts) may fall outside the SEC’s jurisdiction under the Howey Test. This clarity could embolden other projects with similar token structures, reducing regulatory uncertainty for developers and companies operating in the crypto space.
The SEC’s loss in this high-profile case, coupled with its decision to abandon the appeal, may signal a retreat from its aggressive “regulation-by-enforcement” strategy under previous leadership (notably during Gary Gensler’s tenure, which ended with the change in administration in January 2025). With new leadership in place, the agency might shift toward a more collaborative or defined regulatory framework rather than pursuing litigation against crypto firms. Critics of the SEC, including Ripple’s CEO Brad Garlinghouse and figures like Mark Cuban, have long argued that the agency’s approach stifled innovation.
The resolution is widely viewed as a victory for the broader cryptocurrency industry, potentially weakening the SEC’s leverage in ongoing and future cases against other firms like Coinbase or Binance. If courts continue to rule that tokens traded on secondary markets (e.g., public exchanges) are not securities, it could limit the SEC’s oversight of much of the crypto market. This might encourage more institutional adoption and investment, as legal risks diminish for companies dealing with tokens resembling XRP in structure or distribution.
The Ripple case has already fueled momentum for legislative action to define crypto regulations more explicitly. With the SEC’s appeal dropped, Congress may face increased pressure to pass bills like the Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to delineate jurisdiction between the SEC and the Commodity Futures Trading Commission (CFTC). The CFTC could gain more authority over tokens like XRP, treating them as commodities rather than securities. Lawmakers supportive of crypto, bolstered by a pro-crypto shift in the political climate under President Trump’s second term, might use this as a catalyst to accelerate regulatory reform.
Internationally, regulators in jurisdictions like the EU, UK, or Asia often look to U.S. precedents. The Ripple outcome could influence how other countries classify and regulate cryptocurrencies, potentially fostering a more unified global approach—or at least reducing the U.S.’s outlier status in its historically stringent stance. Companies previously hesitant to operate in the U.S. due to regulatory ambiguity might now see it as a more viable market, especially if paired with lighter enforcement under the new SEC regime.
In the short term, the decision has already boosted XRP’s market performance, with its price reportedly jumping nearly 20% following the news on March 19, 2025. This could signal renewed investor confidence in altcoins broadly. Longer term, reduced fear of SEC lawsuits might spur innovation, particularly in decentralized finance (DeFi) and token issuance, as projects feel less constrained by the threat of being labeled unregistered securities.
The ruling is specific to Ripple and XRP, so its applicability to other tokens remains untested until further cases or legislation clarify the broader landscape. The SEC could still pursue different angles in future enforcement actions, particularly against tokens with stronger ties to centralized control or investment promises. The $125 million fine for Ripple’s institutional sales shows that the SEC retains authority over certain crypto transactions, meaning compliance with securities laws remains critical for targeted sales to institutions.
The SEC dropping its appeal against Ripple is a pivotal moment that weakens the agency’s grip on crypto markets, empowers the industry to push for clearer rules, and may herald a more innovation-friendly regulatory environment—especially under a Trump administration perceived as more crypto-sympathetic. However, it’s not a complete deregulation; it’s a step toward redefining boundaries that both regulators and the crypto community will continue to navigate.
