Following the announcement by Ripple Labs CEO Brad Garlinghouse that the company would be dropping its counterclaim against the US Securities and Exchange Commission (SEC), the price of XRP saw an increase of over 3% on Friday. Garlinghouse also expressed hopes that the SEC would reciprocate this move.
“We’re bidding adieu to our counter-appeal, and anticipate the SEC to do the same, as they’ve previously indicated,” stated Garlinghouse in a public post on Friday. In the aftermath of this announcement, XRP, the digital currency linked with Ripple Labs, rose by 3.36% to $2.18 within just five hours, as per CoinMarketCap data.
Garlinghouse further clarified that the company was eager to “close this chapter once and for all” and concentrate on its primary mission – building the Internet of Value. “Lock in,” he added.
This development comes a day after a US district court rejected a joint appeal from Ripple and the SEC for a provisional ruling to cut down a $125 million civil penalty and overturn an order that classified primary sales of XRP to institutional investors as securities transactions under Article 5 of the Securities Act.
The court partially granted the SEC’s request for an injunction and a civil penalty, citing Ripple’s propensity to push the limits of the [Summary Judgment] Order as a potential sign of future transgressions,” stated Judge Analisa Torres.
In response to the ruling, Ripple’s chief legal officer Stuart Alderoty mentioned, “The ball is back in our court.” “We have two choices: either dismiss our appeal challenging the historic institutional sales finding or continue with the appeal,” he added.
Alderoty emphasized that regardless of the path chosen, XRP’s legal status as “not a security” remains intact. “In the meantime, it’s business as usual,” he added.
A reciprocal move by the SEC to drop its appeal could potentially mark the end of a legal saga between Ripple Labs and the US regulator that has spanned over four years. The SEC initiated the lawsuit against Ripple Labs, Chris Larsen, and CEO Brad Garlinghouse in December 2020, alleging that Ripple had unlawfully generated $1.3 billion through XRP sales as an unregistered security, thereby violating federal securities laws.
In August 2024, Garlinghouse claimed that the decision by Judge Torres to impose a $125 million fine on Ripple Labs was a “victory” for the company, highlighting that it was a 94% reduction from the SEC’s initial plan to fine Ripple for $2 billion in damages.
