XRP finally sees legal clarity as the years-long court battle between Ripple and the U.S. Securities and Exchange Commission (SEC) officially ends. The U.S. Second Circuit Court has dismissed both sides’ appeals, formally concluding the controversial lawsuit that cast a shadow over XRP since 2020.

Appeals Withdrawn, Judge’s Verdict Stands

In a decisive move, the Second Circuit approved a request from Ripple and the SEC to drop their respective appeals. The court’s brief but affirming response, “So Ordered,” finalized the joint stipulation for dismissal.

This development stems from a document shared by defense attorney James K. Filan, where the appellate court confirmed that both parties jointly requested to withdraw the ongoing litigation. That request has now been honored, bringing the nearly five-year legal saga to an end.

Caption: Federal appeals court dismisses litigation, ending Ripple vs SEC case

Background: SEC and Ripple’s Legal Clash

The dispute between Ripple and the SEC began with the regulator alleging that Ripple’s XRP sales constituted unregistered securities offerings. Though Judge Analisa Torres later ruled that Ripple’s programmatic XRP sales and other distributions did not involve securities, the SEC appealed this outcome in October 2024, arguing these sales breached federal securities laws.

In rebuttal, Ripple filed a cross-appeal against the ruling it lost—specifically, institutional XRP sales. Judge Torres previously found these sales to violate securities laws, placing a $125 million penalty on Ripple and issuing a permanent injunction preventing further institutional XRP sales without registration.

Pro-Crypto Shift Sets New Course

The tone of the case shifted with the arrival of a more crypto-friendly U.S. administration in January. Encouraged by the policy changes, Ripple and the SEC reached a settlement proposing to drop their appeals, eliminate the injunction, and lower the financial penalty to $50 million.

However, Judge Torres rejected the proposed settlement. Despite the judge’s denial, the parties pivoted and submitted a final joint stipulation for dismissal to the Second Circuit, which has now officially been approved.

Implications for Ripple and the Crypto Market

With the dismissal of both appeals, the judgments set by the lower court remain binding. This means Ripple must pay the full $125 million penalty—an amount previously held in escrow—to the SEC.

Ripple is also required to register any future institutional XRP sales to remain compliant with U.S. securities law. This marks a significant change in how the company can operate within the U.S. financial sphere going forward.

Positively for XRP investors, there is no longer an active threat from the SEC concerning the original lawsuit. The token itself has been declared not to be a security, removing a cloud of regulatory uncertainty that had loomed since December 2020.

XRP Market Reaction

The crypto market responded with enthusiasm to the lawsuit’s conclusion. XRP experienced a significant uptick, rising 5.82% in the past 24 hours. The token is currently trading at $3.03, bringing its market capitalization to $180.29 billion. The favorable outcome has helped restore investor confidence and supports the ongoing rally across digital assets.

Related: XRP Price: $12M Max Pain for Bears

Ripple’s clarity on compliance and the favorable court ruling set the company on a more regulated yet stable path forward. For the broader crypto industry, this outcome reinforces evolving government stances and the growing acceptance of digital assets in regulated markets.