Ripple Labs and SEC to end legal dispute…“Positive for XRP”

The prolonged legal dispute between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs appears to be effectively coming to a close.

On the 7th (local time), the SEC and Ripple Labs jointly submitted a settlement agreement to the appellate court stating that they would voluntarily withdraw their respective appeals and cross-appeals. Accordingly, the SEC and Ripple Labs agreed to bear their own legal costs and to bring the litigation to an end.

Following this news, the price of XRP surged by more than 8%. Immediately after the announcement of the appeal withdrawal, XRP rose from $3.04 to $3.27 in the Binance Tether (USDT) market. Although the price has since slightly declined, it remains stable and is currently trading at $3.15.

However, this settlement does not mean an immediate end to the litigation between the two parties. Under U.S. federal appellate rules, voluntary withdrawal of an appeal through mutual agreement is allowed, but the case is only officially closed once the court accepts it.

Previously, both the SEC and Ripple Labs had submitted several settlement proposals to the court during the litigation, but these were dismissed. In June, Ripple Labs and the SEC submitted joint documents to the New York Manhattan federal court outlining a settlement on fines, but the court rejected the proposal. In 2023, they also attempted a partial settlement, but the court did not accept it.

Nevertheless, the industry views this agreement as significant, seeing it as a sign of shifting regulation by the SEC. Kyungpil Jang, Chief Strategy Officer at Xangle, commented, “The mutual withdrawal of litigation by both parties is a symbolic event demonstrating a decrease in overall regulatory risk in the cryptocurrency industry. Previously, regulatory risks regarding security status had dampened various business activities such as staking services and capital raising, but this is expected to revitalize those activities.”

Byungjun Kim, a researcher at Dispread, commented, “This agreement is the clearest instance yet that the SEC’s regulatory stance is easing. It is likely to have a positive impact on the industry overall, as it sets a precedent for other cryptocurrencies to avoid being classified as securities.”

Experts also believe this withdrawal will serve as a catalyst for Ripple Labs’ business expansion and a rise in the price of XRP. Jang stated, “In the short term, the resolution of SEC-related risks is likely to restore investment sentiment and boost institutional participation, leading to an increase in the price of XRP. In particular, this withdrawal is expected to give momentum to Ripple Labs’ business expansion and the formation of new partnerships.” Kim added, “As regulatory uncertainties dissipate, more financial institutions are expected to pursue partnerships with Ripple Labs, and the likelihood of a spot XRP ETF has also increased significantly.”