Ripple vs. SEC Lawsuit: A Complete Timeline of the Crypto Legal Battle

Key Takeaways

• Ripple’s legal battle with the SEC started in December 2020, with the agency accusing Ripple of conducting an unregistered securities offering through XRP sales.
• Ripple was fined $125 million for institutional sales violations, but the court denied the SEC’s request for disgorgement. Both sides appealed the ruling.
• In January 2025, the SEC argued in its opening brief that XRP transactions should not be treated differently between institutional and retail sales.
• In March 2025, the Second Circuit Court of Appeals upheld Judge Torres’ ruling, confirming programmatic sales as non-securities and clarifying the treatment of institutional sales for digital assets.

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:

Now let’s go into more detail.

I. SEC Files Lawsuit Against Ripple Labs

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. 

II. Discovery Phase and Disputes Over Hinman Emails

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.

III. Judge Torres’ Landmark Ruling on XRP

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:

• Programmatic sales: XRP sales on exchanges to retail investors were ruled as non-securities transactions. The court determined that these transactions did not meet the legal definition of an investment contract, as buyers had no direct relationship with Ripple and did not rely solely on Ripple’s efforts for profit.
• Institutional sales: Direct XRP sales to institutional investors were classified as securities transactions. These sales involved contracts and marketing efforts, with buyers expecting profits tied to Ripple’s actions, meeting the criteria of an investment contract under the Howey Test.

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.

IV. Remedies Phase and Final XRP Judgment

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.

V. Appeals Process Begins

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:

• SEC Appeal: The SEC challenged the decision that XRP programmatic sales were not securities transactions.
• Ripple Cross-Appeal: Ripple contested the classification of institutional sales as securities.

In March 2025, the Second Circuit Court of Appeals delivered a final ruling that largely upheld Judge Torres’ 2023 decision. The ruling confirmed that programmatic XRP sales remain non-securities while institutional sales are classified as securities—with regulatory modifications that provide Ripple with some relief. This nuanced outcome is being interpreted as a partial victory for both parties and is expected to offer clearer guidelines for future digital asset regulation.

VI. Legal Briefs and Amicus Briefs

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.

Ripple Leadership Reactions and Future Outlook

Ripple’s leadership has been vocal about the ruling. Ripple CEO Brad Garlinghouse remarked, “This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.”

Similarly, Ripple’s chief legal officer Stuart Alderoty stated on X, “Today, Ripple moves forward — stronger than ever. This landmark case set a precedent for the domestic crypto industry.”

Despite the industry’s enthusiasm and the significant victory for Ripple, experts note that the SEC’s decision does not establish a binding legal precedent.

Furthermore, the “guardrails” that the crypto industry has been lobbying for remain undefined. Garlinghouse has signaled a desire to revisit the 2023 decision—specifically the imposition of the $125 million fine, which was based on the view that the tokens should have been sold to institutional investors—underscoring ongoing debates about the proper regulatory framework for digital assets.

Despite the evolving political landscape in the U.S.—with the current administration taking a markedly different stance than previous leadership—the industry’s momentum continues to build, with stakeholders eagerly anticipating further regulatory clarity.

Conclusion

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. While the legal battle moved through multiple appeals, the final ruling in March 2025 has provided crucial clarifications—confirming that while retail (programmatic) sales are non-securities, institutional transactions will continue to be regulated as securities with updated guidelines.

Ripple’s leadership remains engaged in fine-tuning its next steps, highlighting both the victory and the unresolved regulatory issues that lie ahead.

This outcome, coupled with evolving regulatory perspectives under the current administration, is expected to shape U.S. crypto regulation and influence the broader market dynamics for years to come.

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