Ripple Triumphs as SEC Drops Lawsuit, Marking a Turning Point for Crypto Regulation

The Securities and Exchange Commission (SEC) has officially dropped its four-year lawsuit against Ripple, bringing an end to one of the most significant legal battles in the history of the cryptocurrency industry. The case, originally filed on SEC Chairman Jay Clayton’s last day in office, accused Ripple of raising $1.3 billion through the unregistered sale of its XRP token.

The decision to withdraw the lawsuit is being hailed as a major victory for Ripple and the broader crypto sector, signaling a shift in the regulatory landscape in the United States.

A Landmark Victory for Ripple

Ripple’s Chief Legal Officer Stuart Alderoty celebrated the ruling, stating:

“Ripple stands alone as the company that fought back—and won on essential legal questions—throwing a major wrench into the SEC’s plans to destroy crypto in the U.S. through enforcement. The SEC has now abandoned its appeal in our case.”

Ripple had spent $150 million in legal fees fighting the SEC, with former Chairman Gary Gensler’s tenure marked by a hostile stance toward crypto. However, in July 2023, a federal judge ruled that XRP is ‘not necessarily a security,’ undermining the SEC’s central argument.

The ruling not only strengthened Ripple’s position but also paved the way for other crypto firms to challenge regulatory actions. Since then, lawsuits and investigations involving Coinbase, Kraken, Robinhood, Binance, and OpenSea have either been dropped, resolved, or put on hold.

Trump Administration and Crypto-Friendly Policies

The decision comes as the political climate around cryptocurrency has dramatically shifted. After crypto firms played a significant role in funding Donald Trump’s 2024 campaign, the new administration has embraced a pro-crypto stance.

In his first two months back in office, President Trump has taken steps to position the U.S. as a global leader in cryptocurrency, promising to make the country the "crypto capital of the planet and the bitcoin superpower of the world."

On March 7, Trump signed an executive order on digital assets, with his crypto czar, David Sacks, standing by his side. During his inauguration celebrations, Sacks famously declared, "The war on crypto is over."

Regulatory Shift: Engagement Over Enforcement

On Friday, the SEC held its first major crypto roundtable, signaling a new approach focused on regulation through engagement rather than enforcement. Leading the charge is Hester Peirce, now head of the Crypto Task Force, who has long been an advocate for clear, industry-friendly regulations.

One of the most significant policy reversals under this new leadership was the rescinding of Staff Accounting Bulletin 121 (SAB 121)—a 2022 rule that required banks to treat crypto assets as liabilities. This rule was widely seen as a barrier to institutional adoption of digital assets and was originally backed by Gary Gensler.

Peirce, celebrating the rollback, posted on X (formerly Twitter):

"Bye, bye SAB 121! It’s not been fun."

What’s Next for Crypto in the U.S.?

With Ripple’s legal battle concluded, industry leaders and Wall Street institutions are reconsidering their stance on crypto. At the World Economic Forum in Davos, CEOs from Goldman Sachs, Morgan Stanley, and Bank of America hinted at a renewed interest in cryptocurrency investments.

Meanwhile, Ripple has vowed to continue advocating for transparent and fair regulations, with Alderoty stating:

“While this chapter is closed, the fight for clear, fair, and transparent crypto regulation continues. Ripple will continue to lead that fight.”

With a pro-crypto administration in the White House and the SEC shifting its regulatory approach, the industry is poised for a new era of innovation and growth in the United States.