Key Highlights:
- SEC went after Ripple claiming that XRP was an unregistered security.
- The legal battle was fought for more than four years and Ripple won partial victories.
- In 2025, both sides dropped appeals and the case was finally closed.
Back in the day, Ripple’s XRP was not just another altcoin, but it was the second-largest cryptocurrency by market cap which was standing right behind Bitcoin. Then, out of nowhere, the US Securities and Exchange Commission (SEC) pointed fingers and said that Ripple sold XRP like it was an unregistered security and kickstarted a lawsuit in December 2020 that shook the entire crypto world.
This lawsuit was dragged for four long years and was full of drama. The price swung to its extremes, there were exchange delistings, rulings that were ambiguous, appeals, and uncertainty that seemed endless. All of this, turned Ripple’s legal case as one of the most watched legal sagas in the history of crypto.
Below is the a quick timeline that traces origins to resolutions and beyond:
2020: SEC Launches Bombshell Lawsuit
In December 2020, the SEC, under the leadership of Gary Gensler, went after Ripple Labs, its CEO Brad Garlinghouse, and co-founder Chris Larsen in New York’s Southern District Court. The allegation? Ripple had supposedly raised $1.3 billion selling XRP without registering it as a security, which was like going against the rules and hence a big no-no under the US law.
Ripple did not step back, instead it fired back and stated that XRP is not a security but a digital currency. They emphasized that XRP is used in RippleNet, a platform that allows fast and low-cost cross border payments for banks and businesses.
The fallout was immediate. On January 19, 2021, US exchanges like Coinbase suspended XRP trading, sending its price crashing from around $0.60 to under $0.20. XRP holders were suddenly left in a limbo as delisting and uncertainty spread across the market.
2021-2022: Discovery Phase and Hinman Emails Drama
During the pretrial discovery phase, Ripple had requested the release of the SEC’s internal “Hinman emails” related to a speech given by the SEC’s former Director William Hinman, in 2018 during which he declared Ether (ETH) a non-security due to decentralization of Ethereum.
Under pressure from Ripple, Judge Sarah Netburn, a magistrate judge, ordered the disclosure of these emails. This exposed a level of inconsistency on the matter by the SEC. Ripple then used this evidence to argue that XRP like ETH, should be considered a non-security utility token.
Another win for transparency! Unredacted Hinman emails to be publicly available soon – stay tuned as the lawyers work through the mechanics to make that happen. https://t.co/o6puPypRHd https://t.co/qmaLVeQaP8
— Brad Garlinghouse (@bgarlinghouse) May 16, 2023
During this same period, SEC Commissioner Hester Peirce proposed Safe Harbour 2.0 to giver crypto projects time to grow without securities registration. Here Ripple spent more than $1 million on lobbying, while courts handled motions on SEC disclosures and expert consultations.
The case gained more attention as industry groups like the Blockchain Association filed amicus briefs that illuminated broader implications for crypto innovations, with Coinbase raising questions on clarity from the SEC. In December 2022, both parties were urging a direct ruling while still disagreeing about the Hinman documents.
2023: Partial Victory and Appeals Begins
Judge Analisa Torres, however, had mixed news for Ripple. In her judgement, the trading of XRP on public exchanges is perfectly fine, but Ripple’s institutional sales are still considered securities, and they need to pay the fine of $125 million. This was a partial win for Ripple. After this ruling, Coinbase, Binance and other exchanges quickly re-listed the XRP token.
Ripple made sure that they celebrated this victory but made sure that people understood that the battle was far from over. Both Ripple and the SEC filed appeals on parts of the ruling. This dragged the case even further. Meanwhile Ripple continued lobbying, engaging with regulators, and emphasizing XRP’s role as a utility token.
2024: Appeals and Penalty
In 2024, the Ripple vs SEC saga moved into the appellate phase. The court formally set Ripple’s $125 million penalty based on the previous year’s ruling. Both Ripple and the SEC appealed parts of the decision, keeping uncertainty very much alive. While the legal battle continued, Ripple kept lobbying and maintaining communications with regulators, and making sure that XRP’s position as a utility token was clear.
2025: The Endgame
In 2025, the Ripple vs SEC saga finally moved toward closure. The SEC dropped its appeal of the core ruling that XRP sales on public exchanges are not securities, and Ripple agreed to drop its cross-appeal.
This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.
The future is bright. Let’s build. pic.twitter.com/7WsD0C92Cm
— Brad Garlinghouse (@bgarlinghouse) March 19, 2025
This finally ended the four-plus year long legal battle between the two. Ripple paid about $50 million of the original $125 million penalty, and kept most of the funds intact. With the ruling, one thing was sure that XRP is not a security on public market. This decision provided a much needed clarity within the crypto world and with this the Ripple vs. SEC legal case was closed.
Why Did This Case Gather So Much Attention?
The Ripple vs. SEC case drew huge attention because it could decide how all cryptocurrencies would have been regulated in the US moving forward. If SEC would have won the case, then many of the tokens that are easily available right would have been considered as securities, however, Ripple’s partial victories gave legal clarity and showed how crypto projects can operate safely under the law.
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