SEC’s Lawsuit Against Ripple Turns 5: How It Happened - U.Today

• The day it began
• The battle year-by-year
• Victorious, but at a cost
• Back to business You might not believe it, but 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.

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

The market reacted violently. XRP crashed over 60% in days, wiping out billions in value. It was a “blood in the streets” moment

Fear of liability caused a domino effect. Major exchanges like Coinbase and Bitstamp immediately delisted XRP or halted trading for U.S. customers.

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The tribalism of crypto spiked. Bitcoin and Ethereum proponents felt safe, but rest of the altcoin market feared they would be next

The battle year-by-year

Ripple refused to settle (unlike most crypto firms before them). They 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. Judges ordered the SEC to hand over the Hinman documents.

The documents revealed internal confusion at the SEC. This bolstered Ripple’s argument that the rules were unclear. The narrative changed from “Ripple is in trouble” to “the SEC is overreaching.”

In June 2023, Judge Analisa Torres issued the historic summary judgment. She ruled that XRP sold on public exchanges (programmatic sales) was not a security. At the same time, she determined that the tokens sold directly to institutional investors was a security

With the “security” question mostly settled, 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 footed strongly pro-crypto views. The SEC moved to withdraw its appeal. Ripple, in turn, dropped its cross-appeal.

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, a figure the user might view as the “higher fine”

Back to business

Ripple survived a regulatory assault that would have bankrupted almost any other company
They shelled out a nine-figure

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 XRPETFs that launched in the fourth quarter of the year.