SEC’s Ripple Fight Nears Collapse, Former SEC Official Signals the End

The U.S. Securities and Exchange Commission (SEC) appears to be unraveling its crypto-enforcement program, with multiple legal retreats and internal restructuring taking place.

The U.S. Securities and Exchange Commission (SEC) is reportedly unraveling its crypto-enforcement program, with multiple legal retreats and internal restructuring taking place. A former SEC official is now predicting that the Ripple appeal will be next to be abandoned.

Former SEC enforcement chief John Reed Stark highlighted the shift on social media platform X this week, stating: “As predicted, like the rest of the SEC’s crypto-enforcement program, the SEC Coinbase case is dead.” He stressed: “The SEC Ripple appeal is obviously next on the chopping block.”

Stark explained that the agency's retreat from crypto enforcement signaled a broader shift in its regulatory approach and anticipated that more cases, including the high-profile Ripple appeal, would soon be abandoned.

The SEC recently dropped its appeal concerning whether crypto firms should be classified as securities dealers, backing away from efforts to expand its authority after facing legal challenges from industry groups. This decision follows a pattern under acting SEC Chair Mark Uyeda, who has overseen several crypto enforcement pauses since taking the helm.

The former SEC official predicted that the agency's next move would be to abandon its case against Ripple Labs, stating: “The Ripple appeal is also most certainly next in line for dismissal. Why? Because the new SEC top brass has made it crystal clear that the SEC will never file another court pleading of any kind arguing that a digital asset is a security, at least not until the Crypto Mom’s task force has completed its mission.”

The agency's shift in approach coincides with a broader overhaul of its enforcement strategy, including the rebranding of its crypto unit as a cyber unit and the removal of key figures involved in crypto litigation.

Stark described the situation as unprecedented, stating: “The SEC's frantic and unprecedented rampage to dismantle its crypto-enforcement program continues: this time, halting two SEC appeals dead in their tracks (buckle up XRP Army, the Ripple appeal has got to be next on the SEC chopping block).” These moves suggest that all crypto-related enforcement efforts may be put on hold indefinitely as the newly formed task force led by SEC Commissioner Hester Peirce, known as “Crypto Mom,” takes control of the agency's direction.

Adding to the upheaval, Stark noted, “Expect all SEC administrative law judges to be fired forthwith,” citing a Department of Justice (DOJ) letter that challenged the legal foundation of the SEC's administrative law judges. He further characterized the agency's shift as extraordinary, stating: “Strange things are afoot at SEC HQ. Never before in the history of the SEC has this kind of radical turnabout in SEC enforcement policy ever taken place. Never, ever, ever.”

Looking ahead, he predicted deeper institutional instability, saying: “What's next? It's the perfect storm at the SEC: a president who does not trust the SEC; a crypto czar who has no respect for the SEC; and a DOGE [Department of Government Efficiency] director who hates the SEC. That's not good for SEC staff.”

As the SEC takes a step back from crypto enforcement, industry observers are bracing for a new regulatory landscape, one where digital assets may face fewer immediate legal challenges.