Ripple Labs announced that the U.S. Securities and Exchange Commission (SEC) has dropped its appeal against a court ruling that previously indicated increased difficulties in regulating cryptocurrency markets.
The SEC had been contesting a July 2023 decision by U.S. District Judge Analisa Torres, which stated that the XRP token sold by Ripple on public exchanges does not qualify as a security under the law. However, Torres also ruled in favor of the SEC by determining that $728 million of XRP sales to institutional investors should have complied with securities regulations.
Last August, she imposed a $125 million fine on Ripple but stayed the penalty while the company appealed to the 2nd U.S. Circuit Court of Appeals in Manhattan, a process that is still ongoing.
In a post on X, Ripple CEO Brad Garlinghouse described the conclusion of the SEC's appeal as a "resounding victory" and a "long overdue surrender" by the regulator. Ripple's Chief Legal Officer Stuart Alderoty added that "Ripple is now in the driver's seat and we'll evaluate how best to pursue our cross appeal. Regardless, today is a day to celebrate."
The SEC chose not to comment on this development.
Since the start of the current presidential term in January, the SEC has shifted its stance on cryptocurrency oversight, halting civil lawsuits against crypto exchanges and suggesting the potential resolution of its civil fraud case against a Chinese entrepreneur associated with a Trump-backed crypto project.
In related news, President Trump has nominated Paul Atkins, a Washington attorney perceived as supportive of the crypto industry, to lead the SEC, potentially replacing Gary Gensler, who has faced criticism from industry figures.
The SEC's lawsuit against Ripple, alleging the sale of unregistered securities, commenced in December 2020, shortly before the end of Trump's first term in office.