In a major development for Ripple and its token XRP, the U.S. Securities and Exchange Commission (SEC) has officially dropped its appeal in the ongoing legal battle with Ripple Labs.
In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has officially dropped its appeal in the ongoing legal battle with Ripple Labs. The news was confirmed by Ripple CEO Brad Garlinghouse, who celebrated the decision, touting it as a "key victory."
Following the announcement, XRP experienced a price surge, rallying more than 10% to reach a high of $2.57. However, the excitement was short-lived, with the price now stabilizing at $2.47 as the market adjusts.
The SEC's decision to drop the appeal comes after a long-running case that began in 2020 when the SEC filed a lawsuit against Ripple, alleging that the company’s token, XRP, was sold in an unregistered securities offering.
After a series of court hearings and legal filings, Judge Analisa Torres ruled in July that XRP itself wasn't a security, a finding that could have broader implications for the cryptocurrency industry. However, the SEC is still planning to appeal Judge Torres's ruling on certain aspects of the case.
Despite the SEC's decision to drop the appeal, the legal battle between the two parties isn't completely over yet. The SEC is planning to pursue a cross-appeal, focusing on Judge Torres's ruling on the no-sol, or "neither-source-of-light, nor-heat,'” claim.
This specific legal point, if upheld, would leave no one who bought XRP from Ripple in the secondary market an "investor" in the SEC's eyes, potentially narrowing the SEC's jurisdiction over XRP.
The SEC's decision to drop the appeal and pursue a cross-appeal may be related to the SEC's broader strategy in regulating cryptocurrencies. Recently, the SEC has been showing signs of adapting its approach, with SEC Chair Gary Gensler stating that institutions like Binance and Coinbase could register as exchange-traded funds (ETFs).
As the SEC continues to adjust its stance on crypto regulation, the outcome of this case will have far-reaching consequences for the industry.
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