SEC may drop Ripple lawsuit

John Reed Stark, a former SEC official, has hinted at the possibility of the SEC dismissing the lawsuit against Ripple. His statement comes as the SEC’s new leadership is becoming more reserved about using enforcement actions against the crypto industry.

Stark highlighted several recent decisions by the SEC that paused legal proceedings against certain subsequent crypto entities. The SEC has recently discontinued legal actions against Coinbase, Binance, Uniswap, and OpenSea, which is a huge indication of changing times.

It also withdrew appeals concerning the status of some crypto businesses as securities dealers. The current SEC acting chair, Mark Uyeda, is embracing the consideration of reviewing cryptocurrency regulation rather than resorting to enforcement measures.

So This is How the SEC Dies.

The Rapid-Fire Demolition of the SEC Crypto-Enforcement Program Continues. SEC Investigations of Uniswap & Opensea Officially Closed. Both Firms Had Received Wells Notices Under SEC Chair Gensler. Dropping of the SEC’s Ripple Appeal Next Up for Sure. pic.twitter.com/6VUDFAX3qK

— John Reed Stark (@JohnReedStark) February 26, 2025

Since Uyeda took over the agency, the SEC has filed five litigation pauses regarding crypto cases. According to Stark, these suspensions are part of a plan to delay legal actions until the regulator’s crypto division, headed by Commissioner Hester Peirce, issues an assessment. This comes in light of the expectations of the establishment of a new task force to advance a set of recommendations to regulate the sector.

Ripple lawsuit in question

Since the SEC recently stepped up its enforcement against crypto companies, many have begun to wonder whether it will abandon the Ripple case as well. Stark pointed out that the SEC has claimed that it will not file new cases arguing that the digital assets are securities until the crypto task force provides direction.

However, Ripple’s lawsuit is different from the previous cases that were dismissed. The court dismissed Ripple’s programmatic sales and distributions of XRP as not being securities but fined Ripple $125 million for its sales to institutional buyers.

Judge Analisa Torres also restrained future institutional sales through an injunction. Given such rulings, many experts think that any dismissal would entail negotiations between Ripple and the SEC on other penalties.

The SEC filed the motion to dismiss its first appeal just before the former Chairman of the SEC, Gary Gensler, left office. Ripple is expected to respond in April 2025. According to attorney James Murphy, dismissing other cases has been fast compared to Ripple due to final judgment.

Ongoing SEC investigations conclude

The SEC also changed its approach with other projects, including Ripple. Robinhood explained on Monday that the SEC has shut its examination into its crypto offering. Earlier last week, Brian Armstrong, the CEO of Coinbase, disclosed that the SEC had also concluded investigating the exchange. The SEC investigation of OpenSea was similarly dismissed.

These actions point to a drastic shift in policy from the enforcement-based regime that Gensler assumed on January 20, 2025, the day Donald Trump assumed the Presidency.

Legal experts also opine that the case is likely to be further dragged down due to discussions contingent on the penalties imposed. Sec attorney Jeremy Hogan described the dismissal of the Coinbase case “with prejudice”, meaning that it cannot be refiled, as a sign of a shift in policy on the part of the SEC.

Hogan opined that the SEC might dismiss the Ripple case even before Paul Atkins assumes the office of the Chairman at the SEC. As of this writing, XRP is currently trading at $2.17.

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