Ripple wins lawsuit again as price surges

A few days ago, Ripple won a phased victory in the three-year lawsuit against the U.S. Securities and Exchange Commission (SEC), causing the price of XRP to surge 26%.

The judge ruled that Ripple's sales of XRP to retail investors did not violate federal securities laws and reduced the SEC's penalty request by about 94%, from $2 billion to a $125.035 million fine.

It is reported that since the SEC sued Ripple in December 2020, the two sides have been engaged in a long legal battle, and Ripple has continued to achieve phased success through legal means, including the court ruling that XRP itself is not a security.

01 The history of Ripple and the SEC

The Ripple story begins in 2004 when Canadian programmer Ryan Fugger released RipplePay, a peer-to-peer payment system that predated blockchain technology by several years.

In 2011, cryptographer David Schwartz, Mt. Gox founder Jed McCaleb, and video game designer Arthur Britto worked together to develop a more efficient system that did not require proof-of-work mining. This system eventually evolved into the XRP ledger and the company Ripple Labs was established.

Over time, Ripple gradually attracted a large number of investors and partners. In 2013, Ripple received $3.5 million in funding, and in 2014, it established partnerships with CBW Bank and Cross River Bank. In 2015, Ripple hired former Yahoo COO Brad Garlinghouse to take a position in the payment network and began to promote the XRP token.

On December 21, 2020, the SEC sued Ripple Labs and its executives, accusing them of conducting an unregistered securities offering. The SEC believes that Ripple's fundraising by selling its XRP tokens violated federal securities laws. After the news was released, the price of XRP fell from $0.58 to $0.21, and several crypto exchanges removed XRP. Ripple CEO Brad Garlinghouse denied the SEC's allegations and said the company would fight the law.

Since the SEC filed the lawsuit, the two sides have launched a protracted legal battle. In the process of responding to the SEC's allegations, Ripple has been constantly seeking legal support and evidence to prove that XRP is not a security.

——Key time nodes

(1) March 2021: Judge Netburn’s ruling

In March 2021, Judge Sarah Netburn ruled that XRP has value and utility, distinguishing it from cryptocurrencies like Bitcoin. The ruling is significant because it highlights the legal differences between cryptocurrencies, paving the way for future classification and enforcement actions.

(2) May 2021: Ripple’s counterattack

Ripple has actively fought back through legal means, claiming that the SEC failed to provide clear guidance, making it impossible for the company to follow its requirements. Ripple's legal team emphasized that the SEC's regulatory treatment of cryptocurrencies is inconsistent and lacks transparency.

(3) July 2023: Partial support from Judge Torres

In July 2023, Judge Analisa Torres partially supported Ripple and ruled that XRP itself was not a security. This ruling won Ripple an important legal victory, and the price of XRP rose sharply. However, the SEC did not give up and continued to pursue legal action against Ripple.

(1) Coinbase delists XRP

After the SEC sued Ripple, the cryptocurrency exchange Coinbase quickly delisted XRP. This move had a significant impact on the XRP market, but it also inspired Ripple to further strengthen its legal fight.

(2) Ripple’s legal expenses

Ripple spent more than $200 million in legal fees in the process of responding to the SEC's allegations, which shows Ripple's determination and financial support in fighting the SEC, and also highlights the importance and complexity of the case.

(3) International cooperation and expansion

Despite the legal challenges, Ripple continues to advance its international expansion strategy, establishing partnerships with multiple financial institutions and partners, demonstrating that Ripple remains committed to the development of technology and the market beyond the legal battle.

Throughout the legal battle, Ripple continued to achieve phased victories, which not only boosted market confidence in XRP, but also provided valuable legal experience for the entire crypto industry.

02Latest settlement progress

In March 2024, the SEC plans to ask a judge to fine Ripple Labs $2 billion.

Ripple's chief legal officer Stuart Alderoty said Ripple's response will be submitted next month. In May, the SEC described Ripple's proposed stablecoin as an "unregistered crypto asset" in its revised response brief for relief measures and insisted on imposing a heavy fine of nearly $2 billion on Ripple.

However, the court ultimately ruled that the SEC's fine was too high and reduced it by about 94% to only $125 million. This ruling is a major victory for Ripple and the entire crypto industry. After the ruling was announced, the price of XRP rose rapidly, reaching a high of $0.6434, a 24-hour increase of 19.7%.

Analysts pointed out that although there may be a technical pullback in the future, this ruling has significantly boosted market confidence, and the long-term trend of XRP is worth looking forward to.

in conclusion

The historical grievances between Ripple and the SEC and the latest settlement progress have not only affected the market performance of XRP, but also had a profound impact on the entire crypto industry. Ripple has demonstrated strong resistance in this legal battle and has achieved a phased victory.

In the future, as the regulatory environment becomes clearer, the crypto industry will have more development opportunities. Investors need to pay close attention to market trends, seize investment opportunities, and realize wealth appreciation.