Crypto’s lengthy struggle with SEC ends in Ripple win
The battle between the crypto industry and the Securities and Exchange Commission (SEC) has reached a significant turning point, with Ripple announcing the dismissal of the SEC’s four-year-old lawsuit against the company. This milestone marks the conclusion of a prolonged legal struggle between the regulator and the crypto sector, reflecting a broader shift in the regulatory landscape.
In an unexpected twist, the SEC dropped its lawsuit against Ripple, which was originally filed on former SEC Chair Jay Clayton’s last day in office. The lawsuit alleged that Ripple raised $1.3 billion through the sale of XRP tokens without registering them as securities. This move is part of a pattern seen in other cases involving major crypto companies and exchanges such as Coinbase, Kraken, Robinhood, Binance, and OpenSea, where lawsuits or investigations have been resolved, dropped, or put on hold.
Ripple’s Chief Legal Officer, Stuart Alderoty, emphasized the company’s victory in a statement to CNBC, highlighting how Ripple challenged key legal issues and disrupted the SEC’s enforcement plans against the crypto industry. This announcement comes after a federal judge ruled in July 2023 that XRP is not inherently a security, undermining the SEC’s foundational arguments in the case.
The significance of Ripple’s win extends beyond the company itself, signaling a shift in the overall sentiment towards crypto regulation. It also played a role in President Donald Trump’s evolving stance on cryptocurrencies. Trump, who has historically been critical of digital assets, outlined a vision for the United States to become the global crypto capital in a speech delivered at a Bitcoin conference after Ripple’s legal victory.
Following these developments, the SEC has embraced a new approach to crypto regulation under the leadership of Hester Peirce, head of the newly established Crypto Task Force. This shift in strategy includes rescinding a controversial rule known as Staff Accounting Bulletin 121, which previously discouraged institutional adoption of digital assets by requiring banks to treat crypto assets as liabilities on their balance sheets.
The regulatory changes and legal victories in the crypto industry have set the stage for increased engagement between Washington and the crypto sector. CEO’s from major financial institutions, including Goldman Sachs, Morgan Stanley, and Bank of America, have indicated a renewed interest and potential involvement in the crypto space following these developments.
As Ripple and other crypto companies continue to advocate for clear, fair, and transparent regulation, the landscape of crypto regulation in the U.S. is evolving rapidly. While the chapter between Ripple and the SEC may be concluded, the broader fight for consistent and supportive regulation in the crypto industry remains ongoing. Stay tuned as the regulatory landscape continues to shift in the evolving crypto sector.
