Key Takeaways
The lawsuit between Ripple Labs and the Securities and Exchange Commission (SEC) is more than a legal dispute—it’s a pivotal moment for the cryptocurrency industry.
With billions at stake and the classification of digital assets under scrutiny, the outcome could set a precedent that shapes crypto regulation in the U.S.
The case will unfold under President Donald Trump’s administration, whose pro-crypto stance has reignited debates about the role of regulation in the ecosystem.
Whether it becomes a step toward clarity or a sign of increasing friction between innovation and the law, the Ripple case reflects the challenges of balancing progress with governance.
This article outlines a timeline of the Ripple–SEC case, examining its origins, major developments, and the broader implications for the future of cryptocurrency.
Here is a summary of the key events in the ongoing legal battle between Ripple and the SEC:
Year | Event | Details |
2020 | SEC Files Lawsuit Against Ripple Labs | SEC accuses Ripple of selling unregistered XRP securities |
2021-2023 | Discovery Phase & Hinman Emails | Disputes over SEC’s 2018 Ether classification |
2023 | Judge Torres’ Ruling on XRP | Programmatic XRP sales ruled non-securities; institutional sales are securities |
2024 | Remedies Phase & Final XRP Judgment | Ripple fined $125M; SEC’s disgorgement request denied |
2024 | Appeals Process Begins | Both Ripple and SEC file appeals |
2022-2024 | Legal Briefs & Amicus Briefs | Industry groups file briefs in support of Ripple |
2025 | SEC Files Latest Appeal | SEC seeks to overturn the 2023 ruling on XRP; Ripple remains optimistic |
Now let’s go into more detail.
The legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) began on December 22, 2020. The SEC accused Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen of conducting an unregistered securities offering by selling XRP, Ripple’s digital token.
According to the SEC, Ripple raised $1.3 billion through these alleged securities sales. Ripple denied the allegations, maintaining that XRP is a digital currency, not a security.
This lawsuit was pivotal for Ripple and raised concerns across the cryptocurrency industry.
For example, Coinbase announced the suspension of XRP trading on its platform starting on January 19, 202, which resumed in 2023.
The discovery phase, or pre-trial stage of the lawsuit, brought heated disputes, particularly over internal SEC communications. Magistrate Judge Sarah Netburn played a key role during this phase, ordering the SEC to release the ‘Hinman emails,’ despite their objections.
These emails revealed internal deliberations and discussions surrounding a 2018 speech by William Hinman, the former director of the SEC’s Division of Corporation Finance (2017–2020).
In his speech , Hinman stated that based on his “understanding of the present state of Ether, the Ethereum network, and its decentralized structure, current offers and sales of Ether are not securities transactions.” Ripple used this statement to argue that XRP, like Ether (ETH), should not be treated as a security.
This statement became a focal point in Ripple’s defense, highlighting potential inconsistencies in the SEC’s classification of cryptocurrencies.
The emails became a turning point in 2023, as they revealed internal SEC disagreements over how cryptocurrencies should be classified.
Ripple’s defense used this to assert that the SEC lacked consistency in its approach and focused on demonstrating that XRP was a utility token with use cases beyond investment.
Judge Netburn’s rulings on the discovery disputes were instrumental in Ripple obtaining these documents, which shaped the case’s trajectory.
Date: Jul 13, 2023
Judge Analisa Torres, presiding in the Southern District of New York, delivered a significant ruling that clarified the regulatory status of XRP. The court distinguished between two types of XRP transactions:
This mixed ruling clarified key regulatory issues for Ripple and the cryptocurrency industry. The court ruled in favour of Ripple regarding programmatic sales, reassuring retail holders. However, it classified institutional sales as securities, underscoring the significance of how cryptocurrencies are marketed and sold.
The court also ruled that XRP itself is not inherently a security, relieving retail holders and potentially setting a precedent for other cryptocurrencies.
Following Judge Torres’ ruling, the court issued penalties for Ripple’s institutional sales violations on Aug 7, 2024.
The court ordered Ripple to pay a $125 million civil penalty. It denied the SEC’s requests for disgorgement of profits and additional prejudgment interest. Additionally, the court barred Ripple from violating securities laws in connection with institutional sales.
The denial of disgorgement was a notable victory for Ripple, limiting the financial impact of the judgment. Disgorgement refers to the legal requirement for a party to return profits gained from unlawful activities.
In this case, the SEC requested Ripple to repay the profits it earned from institutional sales of XRP, along with prejudgment interest. However, the court denied this request, citing insufficient evidence showing that investors were harmed or that Ripple’s actions caused financial losses.
The legal battle intensified when both Ripple and the SEC filed appeals on October 3, 2024. The appeals process moved to the Second Circuit Court of Appeals, creating uncertainty for the cryptocurrency market:
These appeals highlighted the case’s complexity and its potential to shape future cryptocurrency regulation.
Both parties sought to overturn aspects of the July 2023 ruling, ensuring that the legal fight was far from over.
It is important to note that throughout the SEC vs. Ripple case, various industry stakeholders, including the Blockchain Association, Coinbase, Chamber of Digital Commerce, Valhil Capital, LLC, Cryptillian Payment Systems, and others, filed amicus briefs, or friend-of-the-court briefs. Stakeholders filed a significant number of these briefs in late 2022 and early 2023 during the summary judgment phase in the District Court.
The appeals process in 2024 saw additional briefs, showing the cryptocurrency industry’s ongoing concern about the case’s impact on regulation and market stability in the US.
As of January 2025, the appeals process remains ongoing in the Second Circuit Court of Appeals. The timeline for a decision is uncertain, and legal experts anticipate that the case could extend well into 2025 or beyond.
The SEC filed its opening brief on January 15, claiming the lower court wrongly applied the Howey test by treating institutional and retail XRP sales differently. Many see this as a final push by former SEC Chair Gary Gensler, with critics arguing it repeats claims the court has already rejected.
The outcome of the appeals will carry significant weight for the cryptocurrency industry. A final ruling could set important precedents for how digital assets are classified and regulated in the US, with Mark Uyeda expected to manage operations.
In the meantime, Brad Garlinghouse expressed his excitement after attending President Trump’s Inauguration events in Washington, D.C., describing the atmosphere as hopeful for the potential of crypto and blockchain to drive positive change globally.
However, it is worth noting that blockchain and cryptocurrency were not mentioned during the Inauguration, highlighting the ongoing need to bring the industry into focus on such significant platforms.
The ongoing legal battle ensures that Ripple’s case will remain a central topic of discussion in regulatory and cryptocurrency circles.
The Ripple vs. SEC case is a pivotal moment for the cryptocurrency industry, with billions at stake and the future of digital asset regulation on the line. Filed in 2020, the lawsuit questioned XRP’s classification as a security, exposing inconsistencies in the SEC’s approach through evidence like the Hinman emails.
Judge Torres’ 2023 ruling distinguished between programmatic XRP sales, which were not securities, and institutional sales, which were. However, unresolved issues have moved to the appeals process.
In late 2024, the SEC argued the lower court misapplied the Howey Test, while Ripple continued to defend its stance with support from industry leaders through amicus briefs.
As of January 2025, the appeals remain ongoing, with a final decision expected to set key precedents for U.S. crypto regulation and its impact on innovation and market stability.
The Hinman emails included internal SEC discussions about a 2018 speech by former SEC Director William Hinman, where he said Ether was not a security. Ripple argued these emails highlighted the SEC’s inconsistent stance on cryptocurrencies and supported their claim that XRP was not a security. Programmatic sales involve XRP sold to retail investors on exchanges through automated trading. Institutional sales are direct, large-scale XRP sales to institutions like hedge funds, often with contracts and discounts. This distinction was key in Judge Torres’ decision. The Second Circuit Court of Appeals is a federal court that handles appeals from district courts in New York, Connecticut, and Vermont. Since the original case was in the Southern District of New York, the appeal automatically goes to this court to review if the lower court’s decisions were legally correct. Why were the ‘Hinman emails’ so important to Ripple’s defense?
What is the difference between ‘programmatic sales’ and ‘institutional sales’ of XRP?
What is the Second Circuit Court of Appeals, and why is the case there now?