In December 2020, XRP faced a grave threat following a lawsuit initiated by the U.S. Securities and Exchange Commission (SEC). This legal action accused Ripple Labs, the company behind XRP, of conducting unregistered securities sales totaling $1.3 billion since 2013. The announcement sent shockwaves through the cryptocurrency market, causing XRP’s value to plummet by 62% and leading to widespread delistings of the token. The SEC’s move caught the crypto world off guard as it unfolded during the final days of the Trump administration.
Fast forward to August 7, 2025, and the landscape for XRP has dramatically changed. The legal battle finally reached a resolution when both Ripple and the SEC agreed to dismiss their appeals, granting XRP a significant position within the cryptocurrency framework. This conclusion marked a pivotal turn for XRP, establishing it as a digital asset officially recognized as not being a security when sold on public exchanges. This shift reflects a major transformation for Ripple, which has transitioned from a regulatory challenge to a validated financial instrument in the United States.
Amidst this tumultuous landscape, XRP’s community, often referred to derisively as the “XRP army,” became galvanized rather than fragmented by the legal proceedings. While criticisms of XRP and its centralized nature were commonplace before the lawsuit, the SEC litigation brought supporters together in an organized movement to advocate for the token’s standing. Ripple CEO Brad Garlinghouse framed the situation in a December 2020 blog post, asserting their position as “not only on the right side of the law, but we will be on the right side of history.”
One of the notable figures in this grassroots mobilization was attorney John Deaton, who rallied over 75,000 XRP holders to contribute affidavits and testimonies during the case. Their efforts included lobbying and social media campaigns aimed at keeping XRP in the spotlight while exerting pressure on regulators to clarify the token’s status. Information revealed during the proceedings also illustrated the speed and efficiency of the XRP Ledger, which processes payments in five to ten seconds, a stark contrast to Bitcoin’s much slower transaction times.
Key victories for Ripple along the way included an important court ruling in September 2022, which mandated the SEC to release emails from former director William Hinman. These emails underscored inconsistencies in the SEC’s stance on cryptocurrency regulation, particularly surrounding the classification of Ethereum (ETH). The court eventually defined critical distinctions in the Ripple case regarding institutional sales—which were deemed unregistered securities offerings—and programmatic sales, which were classified as not being securities. This nuanced differentiation granted Ripple a partial victory and laid the groundwork for XRP’s classification as a cryptocurrency rather than an outright security.
As the lawsuit drew to a close in 2025, the final settlement resulted in Ripple incurring a manageable $125 million penalty, significantly lower than the initial $2.2 billion sought by the SEC. The market’s reaction to the dismissal was immediate, with XRP’s value rising by 4.5% to around $3, marking a recovery from its lows of approximately $0.20 in late 2020.
This legal victory has repositioned XRP as a cryptocurrency with a unique advantage in regulatory clarity, a status not matched by leading cryptocurrencies like Bitcoin and Ethereum, which must still navigate ambiguous SEC guidance. For XRP holders, this development has solidified a strong bond within the community, fueling commitment and investment interest.
With the legal uncertainties resolved, Ripple is now primed for global expansion and strategic partnerships, particularly in markets where regulatory frameworks are still developing. The conclusion of the SEC lawsuit allows Ripple to focus fully on innovation, including the rollout of its RLUSD stablecoin and enhancements to the XRP Ledger. This newfound stability not only reinforces Ripple’s operational capabilities but also positions XRP for sustained growth in an ever-evolving financial landscape.
