.svg)
Ripple Labs has become the latest crypto defendant to benefit from a Trump-era U-turn on the application of federal securities laws to crypto-assets.
On Wednesday (March 19), Ripple CEO Brad Garlinghouse announced that the company had secured a “long overdue” victory over the US Securities and Exchange Commission (SEC).
“This is it – the moment we’ve been waiting for,” he said. “The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.”
The move brings an end to more than four years of litigation, following the launch of the SEC’s case against Ripple in December 2020.
In its original complaint, the SEC accused Ripple, Garlinghouse and Ripple co-founder Chris Larsen of raising more than $1.3bn through unregistered securities offerings.
As covered by Vixio, both sides had scored points during the litigation, but neither side had achieved a definitive victory — until now.
In 2023, Judge Annalisa Torres ruled in the SEC’s favour that Ripple had conducted an unregistered securities offering when it sold its XRP token directly to institutional investors.
These sales, based on written agreements, were deemed “investment contracts”, thus meeting the criteria of a security transaction under the Securities Exchange Act of 1934 and SEC v. Howey.
However, Judge Torres also ruled in Ripple’s favour that, when XRP was sold “programatically” on public exchanges, these were not unregistered securities offerings.
In effect, the court affirmed that XRP is not in itself a security, but can be offered as a security depending on how it is sold to investors.
The SEC rejected this characterisation, insisting that XRP is a security and that a subsequent appeal would prove this in court.
According to Garlinghouse, the SEC will drop its appeal in full.
“We won on every critical legal point, proving that the digital asset XRP is not a security,” said the Ripple CEO.
“That is now the law, and those wins have laid the groundwork for policymakers to adopt a set of rules for crypto that are in line with nearly a century of securities law.
“With today's news, the war on crypto has ended in defeat.”
Crypto defendants continue to benefit from Trump takeover
Garlinghouse said that Ripple is the “first” US crypto defendant that has had the “resources” and the “determination” to fight the SEC in the courts.
He did not mention, however, that Coinbase had also fought the SEC in court for more than two years, from June 2023 onwards, spending more than $50m doing so.
But last month, as covered by Vixio, the SEC also confirmed that it has dropped its case against Coinbase in full.
The reprieve enjoyed by both companies follows two years of significant spending in US election races.
In 2023 and 2024, Coinbase and Ripple respectively spent more money on political donations than any other company in the US.
Coinbase spent $91m on bankrolling crypto-friendly political action committees’ (PACs) candidates, while Ripple spent $49m.
Garlinghouse alluded to this spending in his announcement, noting that “we won multiple pro-crypto victories at the ballot box last year”.
“Thankfully, we have new leadership in the executive and legislative branches of our government,” he said. “Let’s make the US the crypto capital of the world.”
Since the Trump administration took office, the SEC has also dropped or stayed cases against Binance, Uniswap Labs, OpenSea and Justin Sun, the largest investor in World Liberty Financial, the Trump family crypto business.
Government should not pick ‘winners and losers’, says Garlinghouse
Elsewhere in his victory statement, Garlinghouse included a clip in which he says that “picking winners, in general, is not something the US government should be in the business of doing”.
Several hours later, Garlinghouse appeared on Bloomberg TV, where he confirmed that the Trump administration is planning to include XRP in its forthcoming US Digital Asset Stockpile.
The Ripple CEO also said that, with the SEC case closed, he expects to see multiple XRP exchange-traded funds (ETFs) approved and launched by the end of this year.
As with Bitcoin and Ethereum, these XRP ETFs would be classified as “commodity-based” funds.
In Ripple’s view, when the SEC affirmed in 2018 that it would not treat Bitcoin or Ethereum as securities, it should have made the same exception for Ripple’s XRP.
Regulatory clarity helps Ripple’s payments plans
With the SEC case closed, Ripple is also expected to accelerate its push into cross-border and retail payments.
As covered by Vixio, Ripple had already made progress in this direction, following its partial victory against the SEC in 2023.
In early 2024, it had almost 40 money transmitter licences (MTLs) in the US, plus an approval to operate as a virtual currency business in New York under the state's BitLicense regime.
As of January this year, Ripple held more than 55 MTLs in the US and 60 licences globally, covering payments, stablecoin and crypto custody activities.
Last week, the Dubai Financial Services Authority (DFSA) became the latest authority to grant a licence to Ripple.
The move is expected to boost adoption of Ripple’s stablecoin, RLUSD, which was launched in December last year and has grown to a market cap of more than $130m.
“Securing this DFSA licence is a major milestone that will enable us to better serve the growing demand for faster, cheaper and more transparent cross-border transactions in one of the world’s largest cross-border payments hubs,” said Reece Merrick, managing director for Middle East and Africa at Ripple.
