Source: CryptoNewsNet Original Title: Ripple, XRP Won: SEC Lawsuit Filed This Date 5 Years Ago Original Link: https://cryptonews.net/news/legal/32095808/

Victory for Ripple and XRP Community

The XRP community is celebrating as the Securities and Exchange Commission (SEC) lawsuit against Ripple, filed five years ago in December 2020, has finally reached closure.

Background of the Lawsuit

On December 22, 2020, the SEC filed a high-profile enforcement action against Ripple, alleging that the company violated securities laws by selling XRP without registering it as a security. The case quickly became one of the most-watched legal proceedings in the cryptocurrency industry, rallying support from across the crypto ecosystem. More than a dozen advocacy groups, including the Chamber of Digital Commerce and the Blockchain Association, filed statements supporting Ripple’s position.

The Legal Battle

The SEC contended that XRP was a security under the Howey test, a legal standard derived from a 1946 Supreme Court ruling. Ripple argued that XRP did not meet this test because sales occurred in the secondary market and there was no pooling of profits.

In July 2023, U.S. District Judge Analisa Torres ruled that XRP was not a security in and of itself, though she found that certain institutional sales violated securities law. The industry widely viewed this decision as a victory and a significant check on the SEC’s regulatory authority.

Financial Resolution

While the SEC had sought over $876 million in disgorgement plus $198 million in interest and an additional $876 million in civil penalties, Judge Torres denied the disgorgement claim, finding the case “does not involve allegations of fraud, misappropriation or other more culpable conduct.” Ripple was ultimately ordered to pay $125 million in civil penalties.

Case Closure

In October 2024, both parties dismissed their appeals in the U.S. Court of Appeals for the Second Circuit, bringing final closure to the litigation. The settlement also resolved civil enforcement actions against Ripple CEO Brad Garlinghouse and chairman Chris Larsen, effectively ending one of cryptocurrency’s highest-profile lawsuits.

Market Impact

XRP has experienced significant appreciation since the lawsuit filing, trading at $2.04 at the time of reporting—an 827% increase from the $0.22 low reached in December 2020 when the SEC initially filed the case.