The SEC has decided to continue with the lawsuit against Ripple Labs.
Ripple CEO Brad Garlinghouse called this decision “crazy.”
Next January 20 will mark the beginning of a new presidency of Donald Trump in the United States. With this change of government, a renewal in the leadership of several federal agencies is anticipated. One of the departures already confirmed is that of Gary Gensler, current president of the Securities and Exchange Commission (SEC).
Thus, one of the most controversial stages in the regulation of cryptoassets will come to an end. While it is highly likely that the new administration will take a different approach, Gensler seems determined to make his mark until the last moment. Proof of this is that the SEC has chosen to maintain the litigation against Ripple Labs, despite the fact that there are only a few days left until the change of government.
a long battle
To better understand the context, we must review the case. In 2020, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs, alleging that the company had carried out an unregistered securities offering, selling XRP tokens for a total of $1.3 billion. According to the SEC, XRP should be considered a security, a position that later served as the basis for legal action against exchanges such as Binance, Coinbase and Kraken.
The lawsuit was a milestone in the cryptoasset industry, as it not only involved Ripple, but also put the future of numerous cryptocurrencies and tokens in the US at stake. Judge Analisa Torres’ ruling in 2023 was crucial in this scenario, concluding that sales of XRP on public exchanges, where users buy and sell the token openly, should not be considered an offering of securities.
The SEC later dropped charges against Ripple executives Christian Larsen and Bradley Garlinghouse in connection with the XRP cryptocurrency. In a letter addressed to Judge Analisa Torres, the regulator notified that it would not proceed with the case, dismissing accusations that the two had incited Ripple to violate the Securities Act of 1933.
After a brief respite, the calm gave way to the storm… The SEC decided to appeal to the United States Court of Appeals for the Second Circuit, arguing that Judge Torres’ decision contradicted the precedents established by the Supreme Court and other judicial rulings. clue.
Reasons to be worried?
With the change in government in sight, Ripple asked the SEC to postpone its appeal, but the agency rejected this request. Brad Garlinghouse, CEO of Ripple, harshly criticized this decision, calling it “the definition of insanity” and noting that it is like expecting different results by doing the same thing over and over again. For his part, Stuart Alderoty, legal director of Ripple, minimized the SEC appeal and anticipated that the next administration will probably drop the casesince this is based on already failed arguments.
The latter is important to emphasize, since Donald Trump officially nominated Paul Atkins to chair the Securities and Exchange Commission (SEC). Although his nomination still needs to be approved by Congress, there are expectations for a more favorable approach to cryptocurrencies, aligned with the president’s promises to encourage innovation and growth in the sector rather than restrict it. It is very likely that everything carried out in the Gensler administration will be reviewed and the cases will be frozen.
XRP holders have reason to follow developments closely, although not necessarily to panic. Ripple has shown remarkable resilience and its legal victories have strengthened its position in the industry. This support is also reinforced by cases like Coinbase, which recently scored a major win against the SEC, suggesting that courts are beginning to question excessive regulatory practices.
At the moment, investors do not seem to be surrendered to uncertainty and do seem to buy the arguments by Stuart Alderoty. Following Donald Trump’s victory in the 2024 presidential election, the price of XRP saw a strong rally. That momentum soon gave way to a consolidation phase, where the cryptocurrency began to form a technical pattern known as a bullish pennant. What’s more, in the last few hours, XRP reached price levels not seen since 2018, surpassing the $3 mark.
