The U.S. Securities and Exchange Commission (SEC) has officially concluded its protracted legal battle with enterprise blockchain company Ripple, a saga that spanned nearly four years and involved numerous twists and turns. This resolution, which saw the joint dismissal of appeals by both parties in August 2025, marks a significant turning point for Ripple, particularly with the SEC issuing a crucial waiver that removes Ripple's 'bad actor' disqualification.

The lawsuit commenced in December 2020 under former SEC Chair Jay Clayton, accusing Ripple, along with its CEO Brad Garlinghouse and Chairman Chris Larsen, of selling unregistered securities. Despite initial hopes for a different approach under crypto-savvy Chair Gary Gensler, the agency maintained its stance on 'regulation by enforcement.' The case saw a pivotal moment in July 2023 when District Judge Analisa Torres ruled that secondary XRP sales were not securities. Subsequently, in August 2024, Judge Torres issued her final judgment, which included a $125 million civil fine on Ripple and a permanent injunction prohibiting institutional XRP sales in the U.S. Both the SEC and Ripple filed appeals following this judgment, prolonging the legal uncertainty.

The path to resolution involved a settlement agreement after Gensler's departure in January, aiming to reduce the penalty and remove the injunction. However, Judge Torres refused to modify her final ruling. Consequently, Ripple withdrew its cross-appeal, and the SEC reciprocated earlier in August 2025, officially bringing the grueling legal battle to a close. Stuart Alderoty, Ripple's chief legal officer, declared the company is 'back to business.' SEC Chair Paul Atkins noted that with this chapter closed, the agency can now 'shift our energy from the courtroom to the policy drafting table,' a sentiment echoed by Commissioner Hester Peirce, who stressed the ability to focus on creating a clear regulatory framework for crypto.

A key outcome of this resolution is the SEC's waiver for Ripple's 'bad actor' disqualification. Under Rule 506(d) of the Securities Act, companies found in violation of securities laws are labeled 'bad actors,' which disqualifies them from using Rule 506 exemptions under Regulation D. These exemptions are vital as they allow companies, including startups and cryptocurrency firms, to secure unlimited funds from accredited investors without the cumbersome and time-consuming SEC registration process. The permanent injunction previously imposed on Ripple had blocked this easiest fundraising path for five years. With the waiver, Ripple can now bypass this significant roadblock, making private and pre-IPO fundraising substantially easier and more lucrative.

The market reacted to the news with volatility. XRP's price initially spiked by nearly 9%, reaching $3.38 on the Binance exchange, its highest level since July 23, and showing a more than 24% increase from its local bottom on August 3. This upward movement was largely driven by strong buying pressure from altcoin-loving South Korean traders. However, such news-driven rallies often prove short-lived. Despite optimistic comments from SEC officials and Ripple executives, XRP later experienced a 4% plunge, underperforming other major altcoins and changing hands at $3.15, confirming the ephemeral nature of the initial pump.

Speculation also surfaced regarding asset management giant BlackRock's potential filing for a spot XRP ETF. Analyst Nate Geraci suggested BlackRock might have been waiting for the SEC to drop its appeal against Ripple before making such a move. However, Bloomberg's leading ETF expert, Eric Balchunas, expressed conviction that this was not the case, adding another layer of intrigue to the post-settlement landscape for XRP.