Ripple makes significant progress in legal dispute with SEC

Recently, Ripple achieved a significant breakthrough in its three-year lawsuit with the U.S. Securities and Exchange Commission (SEC), resulting in a 26% surge in XRP prices.

The court ruled that Ripple's sale of XRP to retail investors did not violate federal securities laws, and significantly reduced the SEC's originally demanded fine of $2 billion to approximately $125 million, a reduction of up to 94%.

Since the SEC filed a lawsuit against Ripple in December 2020, both parties have engaged in a protracted legal battle. Throughout this process, Ripple has continuously achieved interim victories through legal means, the most critical of which was the court ruling that XRP itself is not a security.

The Dispute Between Ripple and the SEC

The story of Ripple dates back to 2004 when Canadian programmer Ryan Fugger developed a peer-to-peer payment system called RipplePay, which was several years ahead of the emergence of blockchain technology.

In 2011, cryptographers David Schwartz, Arthur Britto, and a founder of a well-known exchange jointly developed a more efficient system that did not rely on proof-of-work mining. This system ultimately evolved into the XRP Ledger and gave rise to Ripple Labs.

As time went by, Ripple gradually attracted numerous investors and partners. In 2013, the company secured $3.5 million in funding; in 2014, it established partnerships with CBW Bank and Cross River Bank. In 2015, Ripple appointed former Yahoo COO Brad Garlinghouse to a key position and began promoting the XRP token.

On December 21, 2020, the SEC filed a lawsuit against Ripple Labs and its executives, accusing them of conducting an unregistered securities offering. The SEC believes that Ripple's actions of raising funds through the sale of XRP tokens violated federal securities laws. This news caused the price of XRP to plummet from $0.58 to $0.21, and several cryptocurrency exchanges delisted XRP. Ripple CEO Brad Garlinghouse immediately denied the SEC's allegations and stated that the company would actively defend itself.

In this prolonged legal battle, there are several key time points worth noting:

1. In March 2021, Judge Sarah Netburn ruled that XRP has value and utility, distinguishing it from cryptocurrencies like Bitcoin. This ruling provides an important reference for the classification and regulation of cryptocurrencies in the future.

2. In May 2021, Ripple actively fought back, pointing out that the SEC failed to provide clear guidance, which resulted in the company being unable to comply with its requirements. Ripple's legal team emphasized the inconsistencies and lack of transparency in the SEC's cryptocurrency regulation.

3. In July 2023, Judge Analisa Torres partially supported Ripple's claims, ruling that XRP itself is not a security. This ruling marked an important legal victory for Ripple, and the price of XRP subsequently surged.

It is worth noting that after the SEC sued Ripple, several major trading platforms quickly delisted XRP, which had a significant impact on the XRP market. At the same time, Ripple has spent over $200 million in legal fees in this legal battle, demonstrating the company's determination and financial support in resisting the SEC.

Despite facing legal challenges, Ripple continues to actively advance its international expansion strategy, establishing partnerships with multiple financial institutions, demonstrating the company's ongoing focus on technology and market development beyond legal matters.

Latest Settlement Progress

In March 2024, the SEC originally planned to ask the judge to impose a $2 billion fine on Ripple Labs. Ripple's Chief Legal Officer, Stuart Alderoty, stated that the company would submit a response next month. In May, the SEC described Ripple's proposed stablecoin as "unregistered crypto assets" in a revised document and insisted on imposing a heavy penalty of nearly $2 billion on Ripple.

However, the court ultimately determined that the SEC's fine request was excessively high, significantly reducing it by about 94%, with a final amount set at $125 million. This ruling is a significant victory for Ripple and the entire cryptocurrency industry. Following the announcement of the ruling, the price of XRP rose sharply, reaching a high of $0.6434, with a 24-hour increase of up to 19.7%.

Analysts point out that although a technical correction may occur in the short term, this ruling significantly boosts market confidence, and the long-term trend of XRP is worth looking forward to.

Summary

The dispute between Ripple and the SEC, along with the latest developments in their settlement, has not only affected the market performance of XRP but has also had a profound impact on the entire cryptocurrency industry. Ripple has demonstrated strong resilience in this protracted legal battle and has achieved a significant victory.

In the future, as the regulatory environment becomes clearer, the cryptocurrency industry is expected to welcome more development opportunities. Investors need to closely monitor market trends, seize investment opportunities, and achieve asset appreciation.