A significant regulatory milestone may be on the horizon for XRP and the wider crypto market in the US as reports suggest that the legal dispute between Ripple Labs and the US Securities and Exchange Commission (SEC) is nearing its conclusion.
According to “well-placed sources” cited by FOX journalist Eleanor Terret, the case is currently in “the process of wrapping up,” with an outcome anticipated shortly.
Ripple Seeks Favorable Terms In SEC Lawsuit Settlement
The SEC initiated its lawsuit against Ripple in late 2020, accusing the company of selling its cryptocurrency, XRP, as an “unregistered security.” This legal action had significant implications for XRP, contributing to a prolonged downtrend in its price, which fluctuated between $0.30 and $0.50 for several years.
Ripple, however, has consistently maintained that XRP should be classified as a digital currency rather than a security, positioning itself against the SEC’s assertions.
Sources indicate that the delay in reaching a resolution has stemmed from Ripple’s legal team negotiating more favorable terms in light of a prior August district court ruling.
This ruling imposed a $125 million fine on Ripple and included a permanent injunction preventing the company from selling XRP to institutional investors.
Shifting Regulatory Winds In The US
Ripple’s legal strategy, according to Terret, appears to hinge on the argument that if the SEC’s new leadership is opting to clear the enforcement slate for previously targeted crypto firms, then it would be unjust for Ripple to continue facing penalties.
The complexity of the case is heightened by the SEC’s own uncertainties regarding potential wrongdoing. Accepting the Torres ruling as it currently stands would imply that Ripple admits to misconduct, a position that seems inconsistent with the SEC’s stance on regulatory clarity and enforcement in the crypto sector.
This coincides with a broader shift in regulatory focus under the new administration of President Donald Trump, who has signaled a more lenient approach toward cryptocurrency firms.
The SEC has begun winding down legal actions against various players in the crypto market, such as Coinbase, Kraken, and Uniswap Labs, indicating a potential pivot towards fostering innovation rather than stifling it through aggressive enforcement.
At the time of writing, XRP is trading at $2.20, showing signs of recovery with a 1.2% increase in the 24-hour time frame.
Featured image from DALL-E, chart from TradingView.com
