The US Securities and Exchange Commission may be on the verge of concluding its enforcement action against Ripple Labs after more than four years of proceedings.
A March 12 post on X by Fox Business reporter Eleanor Terrett mentioned that the SEC’s case against Ripple was “in the process of wrapping up” as both sides filed an appeal and a cross-appeal related to a $125-million court ruling made in August 2024. The civil suit against the blockchain company, initiated in December 2020, accused Ripple and several executives of utilizing XRP as an unregistered security for fundraising.
Stuart Alderoty, Ripple’s chief legal officer, stated on March 11 that the SEC’s civil case was “far more advanced” than many other cases the agency had chosen to withdraw following the inauguration of US President Donald Trump and the exit of Chair Gary Gensler. Since January, the SEC has declared it will not proceed with enforcement actions against platforms like Coinbase, Consensys, Kraken, among others.
“We do have a judgment, and we are appealing — this adds some additional complexity,” Alderoty remarked about the possibility of the case being dismissed. “However, we remain hopeful that we will reach a resolution with the SEC, and if that does not happen, we are ready to advance with the appeal.”
Alderoty noted that there are several potential scenarios for concluding the SEC case, should both parties agree on winding it down. If Ripple and the SEC mutually resolve to withdraw their appeal and cross-appeal in the Second Circuit, then the $125 million judgment from the lower court would remain in effect. If there is disagreement regarding the financial judgment, the blockchain firm and the SEC would need to collaboratively seek any adjustment from a judge.
Related: Why is the Ripple SEC case still ongoing amid a sea of resolutions?
The SEC v. Ripple case is notable for one of the first significant court decisions that favored the cryptocurrency sector when Judge Analisa Torres ruled that XRP was not classified as a security under the SEC’s jurisdiction — specifically concerning programmatic sales on exchanges. As of the time of this report, no filings indicating the SEC’s intention to withdraw from the case appeared on the dockets of the US District Court for the Southern District of New York or the US Court of Appeals for the Second Circuit.
Change of tone at SEC under Trump
While the SEC initiated the Ripple case during Trump’s former chair, Jay Clayton, the commission increased the frequency of enforcement actions after Gensler’s confirmation in 2021.
In a December 2024 interview, Ripple CEO Brad Garlinghouse expressed that the firm may not have engaged as deeply in US politics if the SEC had been directed by a different individual than Gensler. Under Garlinghouse’s leadership, Ripple contributed $45 million to the political action committee Fairshake during the previous election cycle and added another $25 million in November 2024.
Ripple also pledged $5 million in XRP to Trump’s inauguration fund following his election success, with both Garlinghouse and Alderoty attending various events in Washington, DC, on January 20 as official guests. The chief legal officer personally contributed over $300,000 to political action committees supporting the US president’s initiatives.
The link between political contributions to Trump and Republicans and the SEC choosing to drop certain enforcement cases has led many critics to suggest potential conflicts of interest within the administration. Another significant backer of Fairshake, Coinbase, which donated $1 million to Trump’s inauguration, saw its SEC civil case suspended in February. CEO Brian Armstrong also participated in a crypto summit at the White House on March 7, alongside Garlinghouse and others.
Alderoty indicated that the SEC’s decision to drop cases was “independent” of any political donations, being more indicative of Acting Chair Mark Uyeda’s approach to the industry and its regulations.
As of this report, the US Senate has not set a date for a hearing regarding the nomination of the potential next SEC chair, Paul Atkins. Commissioner Hester Peirce noted in February that the SEC would likely wait to establish a crypto regulatory agenda until a new chair assumes office.
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