End of legal battle shifts agency focus from litigation to policy-making
The United States Securities and Exchange Commission (SEC) is signaling a strategic pivot toward clearer cryptocurrency regulations after concluding its nearly five-year legal battle with Ripple Labs. The high-profile dispute, which has shaped much of the industry’s legal landscape, officially ended last Thursday when both parties agreed to drop their appeals and cover their own costs, according to a filing with the Second Circuit Appeals Court.
SEC Commissioner Hester Peirce described the settlement as a “welcome development” that frees resources for policy work. “Minds once occupied with litigation now can concentrate on creating a clear regulatory framework for crypto,” she said in a post on Monday.
SEC Chair Paul Atkins echoed the sentiment, adding: “With this chapter closed, we now have an opportunity to shift our energy from the courtroom to the policy drafting table. Our focus should be on building a regulatory framework that fosters innovation while protecting investors.”
This marks a potential inflection point for the SEC, which has faced criticism for what many in the industry consider regulation through enforcement rather than pre-established guidelines.
Ripple Case Background
The SEC first sued Ripple in December 2020, alleging the company raised $1.3 billion through unregistered XRP sales. A key 2023 court ruling determined that XRP was not a security when sold to retail investors, but was a security in sales to institutions. Ripple was fined $125 million in August 2024.
The case’s resolution coincides with legislative momentum behind the Digital Asset Market Clarity Act (CLARITY Act), which aims to define how digital asset markets operate in the United States.
Political Divide Over Crypto Legislation
While Republican lawmakers and the Senate Banking Committee aim to pass the bill by September 30, Democratic leaders have voiced strong opposition, labeling it “dangerous” for investor protections. This political divide may influence how quickly — and in what form — a comprehensive U.S. crypto framework emerges.
With litigation now behind them, the SEC’s next moves could shape how the U.S. competes in the global digital asset space over the next decade.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.