Why is Ripple’s XRP SEC case still ongoing amid the dismissal spree?

Ripple Labs and the US Securities and Exchange Commission, a court battle that has gone on for more than four years now. We can argue that since 2020, there’s never been a moment in time that the XRP community has felt the case will come to a close more than this year. But why hasn’t the lawsuit been dismissed, yet other institutions like Coinbase, Kraken, and OpenSea are in the clear?  Here’s why.

Since US President Donald Trump made his official comeback to the White House, the SEC has been slowly walking away from its aggressive enforcement approach toward the cryptocurrency industry, which was seen under the Biden administration, led by former chair the infamous Gary Gensler.

The agency pursued several lawsuits against major crypto firms like Ripple Labs, Binance, Coinbase, and Kraken, claiming these platforms violated securities laws. But there could be light at the end of the pitch-black tunnel; the Trump administration loves crypto.

Commissioner Hester Peirce, who now leads the SEC’s Crypto Task Force, recently issued a statement that criticized the previous administration’s reliance on “regulation by enforcement.” 

She reckoned that “blurry regulatory laws” harmed the American public, stifled the growth of the crypto industry, and “impeded the ability of the Commission’s skilled and dedicated professional staff” to exhaust their expertise in finding a common ground where everyone is satisfied.

Still, even though several cases have been thrown out the window, Ripple is still looking for a way to escape the clutch of the financial regulator. And just like members of the XRP family, we are all waiting for the SEC to give us a clear reason why.

The SEC vs Ripple: Four years and counting

The SEC’s lawsuit against Ripple, filed in December 2020, alleges that the company illegally raised funds through XRP sales without registering the asset as a security. It also accuses Ripple executives Brad Garlinghouse and Chris Larsen of personally profiting from unregistered XRP sales, amounting to $600 million. 

The financial watchdog also propounded that Ripple distributed billions of XRP in exchange for services, further violating securities laws. Injunctive relief, disgorgement of profits with interest, civil penalties, failure to provide investor disclosures; to say the SEC fired at Ripple on all fronts is an understatement.

In 2023, however, the road became a little clearer when US District Judge Analisa Torres ruled in favor of Ripple, stating that blind bid-ask sales of XRP did not constitute securities transactions. 

But the SEC did not want to let this go without a word, as in one of its final actions under Gary Gensler, the agency appealed the ruling on January 15, 2025. 

Why is the SEC quiet on Ripple?

The US financial watchdog has dismissed several cases in recent weeks, some crypto advocates are speaking of an internal resistance within the agency preventing the conclusion of Ripple’s case. 

On Monday, former SEC Office of Internet Enforcement Chief John Reed Stark said that the speed reversal of crypto enforcement actions could be a good thing for Ripple.

“So this is how the SEC dies. The rapid-fire demolition of the SEC’s crypto-enforcement program continues. SEC investigations of Uniswap & OpenSea officially closed. Dropping of the SEC’s Ripple appeal next up for sure,” Stark stated.

Other legal experts see Ripple pushing for a more favorable settlement, making them in no hurry to see the case end. Through a post on X, Attorney James Murphy speculated that Ripple could be negotiating to vacate Judge Torres’ ruling.

“The Torres decision was unquestionably GREAT for $XRP holders, BUT the finding of securities law violations and the injunction (with attendant ‘bad boy’ provisions) are not so great for Ripple. This is particularly true if Ripple is considering a future exempt securities offering or IPO,” he wrote.

Murphy also predicted the SEC might be willing to accept a settlement where both sides dismiss their appeals and Ripple pays the $125 million fine. Still, he noted that Ripple may be holding out for a better deal. Why? Because the digital asset company could be feeling hard done by facing the heat from regulators, while other organizations like the Ethereum Foundation, operated much more freely.

Will Ripple’s connections to the Trump Administration be enough?

Ripple has undoubtedly crawled its way to Washington, moving away from the allegations that they supported former Vice President Kamala Harris against President Trump. 

The company’s executives have actively sought favor with the new White House leadership, with CEO Brad Garlinghouse meeting Donald Trump at Mar-a-Lago on January 8. 

The company seems to be in good spirits with Trump, who is now back in office moving strings to add XRP into his proposed US crypto strategic stockpile. In a Truth Social post made on Sunday, he doubled down his support for digital assets.

“A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!” Trump wrote.

The US President nominated former commissioner Paul Atkins to replace Gary Gensler as SEC Chair, and the general expectation is that he will bring regulatory clarity to the crypto industry at large. Some agency officials could be waiting for new leadership and what influence Trump will have on Atkins, before making a final decision on the case.

The SEC might be rolling back its previous enforcement actions, but the mere fact that no action has been taken on matters Ripple, we don’t know when the financial regulator will let go of the lawsuit.