XRP Skyrockets: SEC Dismisses Ripple Lawsuit, What It Means for Investors
In a significant turn of events for the cryptocurrency sector, Ripple CEO Brad Garlinghouse has announced a “resounding victory” as the SEC has decided to drop its appeal against Ripple Labs. This decision reflects the evolving dynamics of regulatory attitudes towards the blockchain and cryptocurrency industries in the United States.
Background on the SEC Lawsuit Against Ripple
The SEC initiated legal action against Ripple, Garlinghouse, and co-founder Christian Larsen in 2020. The regulatory body accused them of raising over $1.3 billion through an unregistered and ongoing digital asset securities offering. This lawsuit underscored the SEC’s strict stance on cryptocurrency regulation.
Ripple’s Partial Victory in 2023
In 2023, Ripple achieved a significant milestone when a judge ruled that the company did not violate federal securities laws by selling the XRP token on public exchanges and through automated algorithms. However, the victory was not absolute; the court also determined that the institutional sale of XRP did breach federal securities law, resulting in a $125 million penalty for Ripple.
- Judge Analisa Torres’ Ruling: Confirmed Ripple’s compliance for public sales.
- Punishment: Ripple was fined $125 million instead of the $2 billion the SEC originally sought.
SEC Drops Appeal: A Turning Point for Cryptocurrency Regulation
In a surprising twist, the SEC has officially abandoned its appeal, a move that Garlinghouse describes as a “long overdue surrender.” He criticized the previous SEC leadership under chairman Gary Gensler, asserting that their actions were more about intimidation than investor protection. Garlinghouse stated:
“They weren’t out to protect investors; they were out to intimidate and terrorize.”
Impact on XRP Holders
Garlinghouse emphasized the detrimental effects of the SEC’s lawsuit, claiming it wiped out $15 billion in value for innocent XRP holders. He argues that the SEC’s actions amounted to market manipulation rather than safeguarding investors.
Ripple’s Political Involvement
Last year, Ripple invested $50 million into Fairshake, a federal super political action committee (PAC) supporting pro-crypto candidates for the upcoming 2024 US elections. Garlinghouse expressed optimism regarding new leadership in both the executive and legislative branches, stating:
“Thankfully, we have new leadership … actively seeking a rational and constructive way forward on crypto.”
Broader Implications for the Crypto Industry
Ripple is not alone in reaping the benefits of changing regulatory landscapes. Under Trump’s administration, the SEC has also dropped cases against other crypto firms like Coinbase and Robinhood. Garlinghouse believes this is an encouraging moment for the industry:
“This is an incredibly promising moment. Let’s come together. Let’s leave the tribalism behind.”
For more insights on the evolving regulatory landscape in cryptocurrency, visit SEC.gov.
