Ripple vs SEC Explained: The Full XRP Lawsuit So Far

The US Securities and Exchange Commission’s (SEC) lawsuit against Ripple is one of the longest-running crypto cases in history. 

Filed in December 2020, the legal battle is still ongoing. Before the lawsuit, Ripple’s altcoin XRP was deemed a major competitor to Bitcoin and Ethereum. However, the SEC’s lawsuit centred around XRP, which caused the token to lose over 300% from 2021 to 2024. The XRP community missed out on several bullish cycles due to stagnation from the legal battle.

In 2025, the legal battle is almost over, and all the odds are in XRP and Ripple’s favor. The SEC’s leadership change under the new administration has driven the industry to drop its crypto enforcement actions. So far, the commission has dropped all lawsuits and legal cases against major crypto companies like Coinbase, Kraken, Robinhood, Uniswap, MetaMask, and more.

The only major case that remains is the Ripple lawsuit, and 16 April is an important deadline for the resolution of this case. Here’s every development on the SEC vs. Ripple case so far:

What is the XRP lawsuit about?

The Ripple lawsuit centers on allegations by the SEC that Ripple Labs sold XRP in a way that should have been regulated as a securities offering. Here’s a clear breakdown:

SEC’s allegations

The SEC claims that when Ripple sold XRP, it treated the token like an investment product. In other words, investors were led to believe they would profit from Ripple’s efforts (like growing the company), but XRP wasn’t registered with the SEC as a security. This is important because securities must follow strict disclosure rules to protect investors.

According to the SEC, Ripple raised about $1.3billion by selling XRP without meeting the registration requirements under U.S. securities laws. The SEC argues that this sale was essentially like selling shares in a company, where buyers expected profits from Ripple’s work.

Ripple’s position

Ripple argues that XRP is not an investment or a security at all. Instead, it’s a digital currency designed to facilitate fast and low-cost cross-border payments, similar to how Bitcoin or Ethereum function. Ripple maintains that XRP’s value comes from its use in transactions, not from the efforts of the company behind it.

The market impact

When the lawsuit was announced, the uncertainty over XRP’s regulatory status led many investors to worry about potential penalties or forced changes in how XRP could be traded. This uncertainty prompted exchanges to delist XRP for US customers and caused a significant drop in price as traders sought safer investments.

Over time, the ongoing legal battle kept XRP in a state of limbo. Investors and market participants were unsure how the case would resolve, which kept volatility high. This meant that even as Ripple continued its business, the unresolved legal questions led to prolonged pressure on XRP’s price.

Key milestones in the SEC vs Ripple lawsuit

December 2020: Lawsuit initiation

The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Chris Larsen. The agency alleged that Ripple raised roughly $1.3bn through XRP sales without registering them as securities.

Early 2021: Initial challenges and legal maneuvers

• Ripple’s defense: Ripple argued that XRP functions as a digital currency used for fast, low-cost cross-border payments — not as an investment contract subject to the Howey test. XRP holders, led by figures such as attorney John E. Deaton, contested the SEC’s claims by emphasizing the token’s utility.
• Motions and hearings: Early hearings and motions focused on questions of fair notice and whether the SEC had provided adequate regulatory guidance regarding XRP’s status.

2022: Escalation through discovery and summary judgments

Both parties filed motions for summary judgement. Deadlines were set for the disclosure of sensitive SEC documents (including the Hinman emails), which played a pivotal role in framing the legal debate.

The Hinman emails: Major breakthrough 

The Hinman emails are a series of internal communications from William Hinman, a former director at the SEC, that became key evidence in the Ripple lawsuit. Here’s what they are and why they matter:

• What they are: The emails document Hinman’s views on how certain cryptocurrencies should be classified. In these messages, he explained that his interpretation of the Howey Test — used to decide whether an asset is a security — meant that some digital assets (like Ethereum) did not need to be treated as securities. Essentially, they show that Hinman didn’t see every crypto token as an investment contract, which contrasts with the SEC’s stance on XRP.
• Why they matter: In the Ripple case, the SEC argues that XRP should be regulated as an unregistered security. However, the Hinman emails cast doubt on this position by revealing that a high-ranking SEC official had, in his own words, suggested that not all cryptocurrencies are securities.

July 2023: Landmark ruling

• Mixed verdict: Judge Analisa Torres ruled that XRP’s programmatic sales on public exchanges did not constitute securities offerings. In contrast, direct sales of XRP to institutional investors were classified as unregistered securities transactions.
• Penalty: Ripple was ordered to pay a $125m fine — significantly lower than the SEC’s sought penalty of $2bn.

October 2023: Executive relief

Following the court’s ruling, the SEC dropped its personal charges against Ripple’s executives, Brad Garlinghouse and Chris Larsen, although the core litigation against Ripple Labs continued.

October 2024: SEC appeals the ruling

The SEC filed an appeal with the Second Circuit Court of Appeals on 3 October, challenging the district court’s decision. The regulator argued that the ruling conflicted with longstanding Supreme Court precedents and misapplied securities laws to XRP’s programmatic sales.

Late 2024 – early 2025: Shifting regulatory landscape

• Leadership change: SEC Chair Gary Gensler, who was the biggest initiator of behind the ripple lawsuit, resigned on 20 January 2025. Donald Trump nominated pro-crypto candidate Paul Atkins for the SEC chair role. This change has raised expectations that enforcement may become more accommodating to the crypto sector.
• Removing the case: The SEC removed the Ripple lawsuit files from its website on February 2025. Although the lawsuit remains active, it’s no longer visible on the SEC’s site.
• Cross-appeal: Concurrently, Ripple filed a cross-appeal with a critical deadline of 16 April 2025. Legal expert Fred Rispoli has noted that key developments are likely before this date.

March 2025: Current status and market impact

The SEC’s appeal remains under review, meaning the case continues to hang in the balance while Ripple seeks final clarity on XRP’s regulatory classification.

XRP has recently experienced significant volatility. For instance, XRP reached an all-time high near $2.99 in January 2025 before fluctuating in response to ongoing macroeconomic conditions. At the time of writing, the XRP price is trading at $2.25, up 2.5% in the past 24 hours.