It has been five years since the SEC filed a lawsuit against Ripple. What began as an existential threat to one company became the defining regulatory conflict for the entire crypto industry. "Through uncertainty, lawsuits, and nonstop noise, the ecosystem kept growing, and the truth won. History has a way of rewarding perseverance," analyst Jake Claver said in a recent social media post.
The day it began
The SEC complaint, which was made public on Dec. 22, was met with shock within the crypto industry. The lawsuit was filed on the final days of SEC Chairman Jay Clayton’s tenure.
XRP plunged by over 60% in mere days, and it was on the cusp of dropping out of the top 10. It truly was a "blood in the streets" moment.
Major exchanges, including such juggernauts as Coinbase and Bitstamp, quickly moved to ditch the embattled token.
The tribalism of crypto spiked. Bitcoin and Ethereum proponents felt safe, but the rest of the altcoin market feared they would be next.
The battle year-by-year
Ripple refused to settle and hired a massive legal team and argued they lacked the "fair notice" that XRP was a security.
In 2021, the community mobilized. Its members were busy filing amicus briefs and crowdsourcing evidence of SEC inconsistencies.
During the discovery, Ripple demanded internal SEC emails related to a 2018 speech by Director William Hinman, who had declared Ether was not a security. The SEC fought tooth and nail to keep these hidden.
In 2022, procedural rulings began to favor Ripple. Later, the judges ordered the SEC to hand over the Hinman documents. The narrative quickly changed, and Ripple clearly went on offense. This further galvanized the militant community behind the XRP token.
In June 2023, Judge Analisa Torres issued the historic summary judgment. She ruled that the XRPs sold on public exchanges were not investment contracts. At the same time, she determined that the tokens sold directly to institutional investors were securities.
After this, the fight turned to the remedies. The SEC asked for $2 billion in fines and disgorgement. Ripple argued for a penalty closer to $10 million. Judge Torres ordered Ripple to pay a $125 million civil penalty. In October 2024, the SEC filed a notice of appeal.
Victorious, but at a cost
In 2025, the five-year war finally concluded. Ripple emerged as the clear victor, though the peace treaty was expensive.
By mid-2025, the SEC's leadership and priorities had changed, and the agency adopted strongly pro-crypto views. The SEC moved to withdraw its appeal. Ripple, in turn, dropped its cross-appeal.
Even though Ripple "won" on the legal status of XRP, they had to swallow a bitter pill regarding the financial penalty. The company ultimately paid the $125 million judgment.
Back to business
Ripple survived a regulatory assault that would have bankrupted almost any other company, shelling out a nine-figure sum.
In exchange, however, they obtained black-and-white legal clarity in the United States.
The end of the litigation cleared the path for a slew of XRP ETFs that launched in the fourth quarter of the year.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team