Ripple's XRP token experienced a significant surge following an announcement from Ripple CEO Brad Garlinghouse that the U.S. Securities and Exchange Commission (SEC) is dropping its lawsuit against the company. The legal battle, which began in 2020, accused Ripple of violating U.S. securities laws by selling XRP without proper registration. The SEC's decision to withdraw from the appeal has resulted in XRP's price rising nearly 14% to $2.57, marking a substantial recovery since the lawsuit was filed.
XRP, the native token of the open source XRP Ledger, was created by Ripple's founders in 2012. Ripple utilizes the XRP Ledger for its cross-border payments business, with approximately 95% of these transactions occurring outside the United States. As the largest holder of XRP coins, Ripple has been at the center of the SEC's scrutiny over its alleged unregistered security offering to institutional investors. However, XRP was not considered a security when traded on exchanges by retail investors.
The legal dispute has not only impacted Ripple but also played a pivotal role in the broader cryptocurrency landscape. Since the onset of the lawsuit, XRP has climbed over 400%, including a 22% increase this year alone. The SEC's decision to end its enforcement case against Coinbase and clarify that meme coins are not classified as securities further reflects a shift in regulatory focus within the industry.
Ripple CEO Brad Garlinghouse expressed his thoughts on the lengthy legal ordeal, stating:
"It's been almost four years and about three months since the SEC originally sued us, certainly a painful journey in lots of ways." – Brad Garlinghouse
He further commented on the regulatory challenges faced by the cryptocurrency sector:
"The system just feels broken. That we had to fight this fight for the industry and you had an SEC attacking the industry, particularly the Ripple case," – Brad Garlinghouse
The conclusion of the SEC's case against Ripple marks a significant milestone for both the company and the wider cryptocurrency market. With regulatory clarity emerging, Ripple can now focus on expanding its operations and leveraging its position as a leader in cross-border payments.