Ripple and SEC Conclude XRP Lawsuit After Dropping Appeals

Highlights:

• Ripple and the SEC have concluded the XRP lawsuit, ending a long legal dispute.
• Judge Torres’ ruling confirms XRP is not a security when sold to retail investors.
• XRP ETF approval odds remain high following the settlement between Ripple and the SEC.

Ripple Labs and the SEC have ended their legal battle after nearly four years. On Thursday, both parties filed a joint notice with the US Court of Appeals for the Second Circuit confirming they would withdraw their respective appeals.

Ripple's Legal Victory: #XRP Settlement with SEC Marks Watershed Moment for Crypto Regulation

After nearly 5 years of legal battles, the SEC-Ripple saga ends with a $125M settlement – 94% less than the SEC's original $2B demand.

Data point: XRP surged 13% post-settlement,… pic.twitter.com/bNCkWMa731

— Savewithref (Cashback Fees) (@savewithref) August 8, 2025

The SEC dropped a challenge it had filed regarding the ruling that determined XRP was not a security when sold on public exchanges. Meanwhile, Ripple withdrew its cross-appeal. Following the announcement, XRP’s price has surged by more than 8.25% and is trading at $3.31. Meanwhile, its trading volume is up 164.82% to $11.78 billion.

The dispute began when the regulatory body accused Ripple of raising funds through an unregistered securities offering. Filed in the Southern District of New York, the case quickly became a significant test of how courts might classify digital tokens. Judge Analisa Torres delivered a split ruling two years ago, finding Ripple had broken securities laws in institutional sales of XRP but confirming that public exchange sales to retail investors did not fall into that category.

Timeline and Key Rulings in the Four-Year Legal Dispute

Following the decision, the SEC cross-appealed on the matter of retail sales, and Ripple appealed on the cross-appeal. After Donald Trump came back to the White House and the SEC changed its leadership, the agency started to retreat from a number of its enforcement actions, including over a dozen crypto-related cases.

In June last year, Ripple agreed to settle residual penalties with the SEC. Judge Torres imposed a $125 million fine and issued a permanent injunction to prevent Ripple from violating securities laws in future institutional XRP sales. The penalty will go to the US Treasury once the appeals process concludes.

Earlier this year, both sides tried to negotiate a reduced penalty of $50 million, but the court rejected the proposals due to procedural issues. Consequently, the original fine remained unchanged. By withdrawing their appeals, the terms of the settlement have become final, and this legal dispute is over. This decision keeps the 2023 decision standing and gives a clear legal opinion on the classification of XRP as a retail sale.

Ripple and SEC Conclude XRP Lawsuit as ETF Approval Odds Stay High

The dismissal of appeals confirms that XRP is not a security when sold on public exchanges. Ripple’s Chief Legal Officer, Stuart Alderoty, confirmed the case’s conclusion, explaining that the Commission voted to drop the appeal and that both sides filed directly with the Second Circuit. He emphasized that the lawsuit had ended and the company would focus on its operations moving forward.

Following the Commission's vote today, the SEC and Ripple formally filed directly with the Second Circuit to dismiss their appeals.

The end…and now back to business. https://t.co/nVqthNcFOt

— Stuart Alderoty (@s_alderoty) August 7, 2025

The decision has also given rise to speculations of the possible approval of an XRP exchange-traded fund. According to Bloomberg analyst Eric Balchunas, the chances of an XRP ETF getting approval this year still stand at 95%, although there has been a change in market sentiment. According to industry watchers, prominent asset managers such as BlackRock might have kept their filings on hold, pending the outcomes of this case.

Interesting, trades reporting how Polymarket odds of XRP ETF approval went down to 62% after the votes were disclosed showing Crenshaw voting no, but a) she's gonna vote no on EVERYTHING and b) it's meaningless, she's outnumbered = we haven't changed our odds, still at 95%. https://t.co/TamMn8DHVh pic.twitter.com/Ip9G748HrU

— Eric Balchunas (@EricBalchunas) August 7, 2025