XRP Lawsuit Nears End as Ripple Withdraws Cross-Appeal

The protracted legal saga between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) appears to be reaching its conclusion. Ripple CEO Brad Garlinghouse recently announced the company's decision to withdraw its cross-appeal, signaling a desire to "close this chapter once and for all" and shift focus towards building the "Internet of Value." This move follows a recent court ruling that denied a joint motion from both parties to reduce Ripple's civil penalty.

Recent Court Setback and Ripple's Strategic Response

Despite U.S. District Judge Analisa Torres denying a joint request from Ripple and the SEC to lower a $125 million civil penalty and vacate an injunction on institutional XRP sales, Ripple has opted to drop its cross-appeal. Judge Torres had clarified that private agreements cannot override a court's final judgment, requiring "exceptional circumstances" to modify such rulings. Ripple's decision to withdraw its appeal, even after this setback, underscores confidence in the SEC also dropping its appeal, which has been widely anticipated.

XRP's Legal Status Reaffirmed

A critical aspect of Judge Torres's July 2023 ruling, which determined that programmatic sales of XRP to retail buyers do not constitute unregistered securities, remains untouched. This foundational aspect of the ruling provides significant regulatory clarity for XRP's status in secondary markets. As legal expert Bill Morgan noted, "The SEC v Ripple lawsuit is finally, finally, OVER. Common sense prevailed. Programmatic sales are not investment contracts. Ripple has found other ways to sell XRP to institutions. XRP itself is not a security."

Implications for Investors and the Broader Market

The effective conclusion of this lawsuit is expected to usher in a new era of clarity for XRP and potentially the wider crypto market. With the major regulatory cloud dissipating, banks and financial institutions may feel more comfortable engaging with Ripple's technology and XRP without the previous regulatory uncertainty. While Ripple will still accept a civil penalty (likely $102.6 million) and comply with restrictions on institutional sales unless registered, the focus shifts to innovation. This resolution could also expedite XRP-spot ETF approvals, which may drive XRP to new highs, paving the way for increased adoption and integration of Ripple's technology in the financial sector.