XRP has weathered the legal storm: after nearly five years of litigation, a US court has clearly established that XRP is not a security when sold on exchanges, giving Ripple and XRP a rare legal advantage.
The lawsuit with the SEC once caused XRP to plummet 62% and be Delisting in series, but that storm created a legal "moat" that helped XRP break out, attracting organizations and the global community.
- Binding precedent: court determined XRP is not a security when sold on exchanges, clearly distinguishing between retail and institutional sales.
- Community solidarity and strong legal backing, promoting brand sustainability and XRP Ledger ecosystem growth.
- Legal clarity in the US paves the way for global expansion, institutional appeal and accelerated products like RLUSD, liquidation.
How does the SEC lawsuit threaten XRP ?
On December 22, 2020, the SEC accused Ripple of selling $1.3 billion in unregistered securities since 2013, causing XRP to drop 62%, be Delisting , and fall into a legal gray area.
The shock of the end of the Trump administration’s term took the crypto industry by surprise. On August 7, 2025, both sides simultaneously withdrew their appeals, closing the case. XRP entered a new era: gaining the legal clarity that many rival projects craved.
Why is the XRP community so mobilized?
The lawsuit transformed the “XRP army” from an object of ridicule into a united, disciplined, and highly organized movement.
Attorney John Deaton mobilized over 75,000 holder to submit statements and testify in support of Ripple. With the operating structure tied to Ripple, legal compliance is key for XRP to serve as a cross-border payment infrastructure. The community mobilized, petitioned, created social media campaigns, maintained public opinion and put pressure on supervision.
“We will not only stand on the right side of the law, but also stand on the right side of history.”
– Brad Garlinghouse, CEO Ripple, December 22, 2020, Ripple Insights (https://ripple.com/insights/the-secs-attack-on-crypto-in-the-united-states/)
How Fast is XRP Ledger Compared to Bitcoin?
XRP Ledger processes global payments in 5–10 seconds, almost instantaneous compared to Bitcoin which takes over 10 minutes per block.
This speed strengthens the case for using XRP for real-time cross-border payments. Fast settlement reduces volatility risk, optimizes working Capital for financial institutions, and creates a smoother user experience.
What legal victories turned the tide?
In September 2022, the court forced the SEC to release emails from former Director William Hinman, revealing internal conflicts over digital asset classification, especially around Ether.
The focus was on the 2018 statement that ETH was a “native Token , not a security” because it was sufficiently decentralized. The filings showed that there was some disagreement within the SEC. A month later, Judge Analisa Torres ruled that the key distinction was that institutional sales were unregistered securities offerings, while exchange-based sales of the program were not securities. In August 2024, the final penalty was $125 million, 95% lower than the SEC’s original $2.2 billion request.
What does the SEC's forced release of William Hinman's emails mean?
This is a turning point that undermines the SEC's argument, as the filing shows an inconsistent approach to digital assets.
Hinman’s 2018 statement that ETH is not a security because it is sufficiently decentralized has been widely cited. Ripple documents reveal conflicting views within the SEC, asking: if ETH is not a security, why is XRP ?
How to differentiate between “Institutional sales” and “Programmatic sales”?
Institutional sales are considered unregistered securities offerings, while programmatic sales to retail investors are not securities.
This distinction gives Ripple a major win: XRP, when traded on a public exchange, does not give retail investors the expectation of a return on Ripple’s efforts. It thus establishes XRP as a cryptocurrency, not a security by default.
What does Judge Torres' 2023 ruling say?
The court affirmed the key argument: XRP trading on the exchange does not constitute a securities offering, while sales to institutions may be unregistered securities offerings.
The ruling also made it clear that Token themselves are not synonymous with investment contracts. This is the key to untangling the Howey knot for Token circulation on public exchanges.
“XRP, as a digital Token , is not itself a ‘contract, transaction or scheme’ that qualifies under the Howey criteria for an investment contract.”
– Judge Analisa Torres, SDNY District Court, July 13, 2023, Ripple Labs Inc. v. SEC (Source: Justia, https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2020cv10832/551082/)
When will XRP v. SEC close and what will be the outcome?
On August 7, 2025, both parties filed a joint motion to dismiss the appeal, officially closing the case. The results were “set in stone.”
Binding precedent: XRP is not a security when sold on an exchange; establishes a method for determining when a sale of cryptocurrency is a securities offering (e.g., a sale to an institution); the $125 million fine is relatively “easy” compared to Ripple’s resources. The market reacted positively: XRP rose 4.5% to $3, rebounding strongly from a Dip of around $0.20 in 2020. In April 2025, Ripple bought Hidden Road for $1.25 billion, strengthening its institutional liquidation .
“Done… and now back to work.”
– Stuart Alderoty, Ripple Chief Legal Officer, 08/07/2025, X (https://x.com/s_alderoty/status/1953573082821799981)
Why does the lawsuit strengthen the XRP story?
The final ruling turns XRP from a “legal nightmare” into a digital asset with clear judicial recognition in the United States.
Even Bitcoin and Ether rely heavily on non-binding statements/guidance, while XRP has court precedent. Since the July 2023 ruling, XRP ’s market Capital has increased by nearly $180 billion. Clearly, legality creates a sustainable competitive “moat” that is difficult to replicate in the current decentralized model of other projects.
Where Does XRP Stand Compared to Bitcoin and Ether in Legal Clarity?
XRP has precedent: trading on the exchange is not a security. Bitcoin has been treated as a commodity by regulators in multiple statements, while Ether has been controversial, based largely on the SEC’s 2018 speech about “sufficient decentralization.”
While the community has clearer expectations for BTC/ ETH, XRP currently has a unique advantage in the world's largest financial market. This directly reduces compliance risks, opens the door to institutional Capital and payment infrastructure cooperation.
| Asset | Status in the United States | Highlights |
|---|---|---|
| XRP | Court precedent: not a security when sold on the exchange | Retail/institutional discrimination, $125 million fine |
| Bitcoin (BTC) | Non-binding guidance/statement | XEM a commodity in many management statements |
| Ether (ETH) | Non-binding guidance/statement | Hinman 2018 speech: sufficiently decentralized, not a security (SEC, 2018) |
How Does the Growing XRP Ledger Work?
By 2025, XRP Ledger will process around 2 million transactions per day; weekly payments will exceed 8 million, an 800% increase from 2023.
The momentum comes from regulatory certainty, deeper institutional liquidation channels, and the need for real-time payments. As compliance barriers are reduced, businesses are confident in building products on the XRP Ledger, from cross-border remittances to asset issuance.
What's Next for Ripple and the XRP Ecosystem?
Without the SEC’s shadow, Ripple can accelerate its expansion in Asia, Europe, and emerging markets where regulatory frameworks are still evolving.
Legal clarity in the US makes it easier to close banking and fintech partnerships, upgrade products like the RLUSD stablecoin, and expand the capabilities of the XRP Ledger. This is a stable foundation for Ripple to make long-term investments in technology and ecosystem growth.
Frequently Asked Questions
Is XRP a security when traded on the exchange?
No. Court precedent has determined that XRP is not a security when sold on a public exchange, but sales to institutional investors may be considered a securities offering.
How much was Ripple fined after the lawsuit?
$125 million, 95% lower than the SEC's proposed $2.2 billion. This level is considered appropriate for Ripple's financial scale.
When does XRP v. SEC end?
On August 7, 2025, both parties simultaneously withdrew their appeals, officially closing the case and reinforcing the previously established legal precedent.
How fast does XRP Ledger process transactions?
About 5–10 seconds to complete global payments, significantly faster than Bitcoin which takes over 10 minutes per block.
Why is US regulatory clarity important for XRP?
It reduces compliance risk, builds institutional trust, helps Ripple sign partnerships, expand globally, and accelerate products like RLUSD.
