What’s Happening With XRP And The SEC?

CANADA - 2025/02/23: In this photo illustration, the XRP logo is seen displayed on a smartphone ... [+] screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Finally, the moment XRP investors have eagerly awaited has arrived. Ripple CEO Brad Garlinghouse confirmed that the U.S. SEC is withdrawing its legal action against XRP. This development has contributed to a 10% gain for XRP today, adding to its impressive 300%+ growth over the last six months, influenced by several factors detailed earlier.
In late 2020, the SEC sued Ripple, alleging its $1.3 billion XRP sales were unregistered securities offerings. The SEC argued these sales met the Howey Test criteria for investment contracts. Ripple countered that XRP was a currency, not a security, and specifically challenged the characterization of its retail sales.
A federal court ruled that Ripple’s institutional sales were securities, but its retail sales were not, leading to a $125 million penalty, far below the SEC’s $2 billion demand. This case is seen as crucial for U.S. cryptocurrency regulation, as it highlighted the conflict between existing securities law and blockchain technology, and its outcome could set significant precedents. Ongoing appeals and potential SEC leadership changes add to the case’s importance.
Following the SEC’s decision to drop its case against Ripple and the subsequent price movement of XRP, investors will now be speculating about the next major trigger. However, we anticipate continued upward price action in the short term, as the legal hurdle has been overcome. Furthermore, the probability of the SEC approving spot XRP exchange-traded funds has significantly improved, which could act as an additional positive driver for XRP's value.
Beyond ETFs, Ripple’s growth will be driven by its superior technology and rising institutional adoption. The XRP Ledger’s speed, security, and cost-effectiveness for global transactions, surpassing traditional systems like SWIFT, attract financial institutions. Integrating Ripple’s technology into banking infrastructure will boost liquidity and utility, increasing XRP demand. Ripple’s long-term growth prospects are strengthened by ongoing technology advancements, strategic partnerships, and global expansion, further bolstered by XRP's inclusion in Trump's strategic cryptocurrency reserve.