SEC’s Lawsuit Against Ripple Turns 5: The Legal War That Redefined Crypto

On December 22, 2025, the cryptocurrency community marked exactly five years since the U.S. Securities and Exchange Commission (SEC) launched its high-stakes legal offensive against Ripple Labs. What began as a “parting shot” by the outgoing SEC Chair Jay Clayton has evolved into the most significant regulatory benchmark in the history of digital assets, ultimately concluding with a landscape-altering settlement in early 2025.

The 2020 Spark and Immediate Fallout

The conflict ignited when the SEC filed a complaint alleging that Ripple, along with executives Brad Garlinghouse and Chris Larsen, had conducted a “$1.3 billion unregistered securities offering” through the sale of XRP. The impact was instantaneous; exchanges delisted the token, and billions in market value evaporated overnight. However, unlike many firms that opted for quick settlements, Ripple chose to fight, arguing that XRP was a bridge currency rather than an investment contract.

A Landmark Victory and the Path to Clarity

The momentum shifted on July 13, 2023, when Judge Analisa Torres issued a summary judgment that fundamentally changed the industry. She ruled that while institutional sales were securities, programmatic sales to retail investors on exchanges were not. Reflecting on the journey later, Garlinghouse stated, “I am finally able to announce that this case has ended. It’s over. Sitting here today, and reflecting on four years ago, it seems very clear to me that this case was doomed from the start.”

The 2025 Legacy

Following the final settlement in May 2025, which saw the SEC return over $75 million in escrowed funds to Ripple, the industry has entered a new era. The case effectively ended the era of “regulation by enforcement” for many, paving the way for the first spot XRP ETFs. Today, the five-year battle stands as a testament to the resilience of the #XRPArmy and the shifting regulatory tides in the United States.