What is the cause of Ripple's lawsuit against the SEC?

In December 2020, the Securities and Exchange Commission (SEC) filed a lawsuitRipple Lab, Triggered the most eye-catching battle in cryptocurrency regulation. The U.S. Securities and Exchange Commission claims the sale of Ripple coinXRP coin—Dating back to 2013—constituted an unregistered securities offering. Essentially, regulators argue that XRP is a security (similar to stocks or investment contracts), and Ripple and its executives (CEO Brad Garlinghouse and Chairman Chris Larsen) illegally raised $1.3 billion in an unregistered manner. Ripple denies these allegations and insists that XRP isDigital currency, not a security, and therefore not within the regulatory purview of the Securities and Exchange Commission. The fundamental disagreement over the classification of XRP has laid the groundwork for a legal battle that will last for years and send shockwaves through the cryptocurrency industry.

The announcement of the lawsuit has shocked investors and blockchain companies. The U.S. Securities and Exchange Commission (SEC) targeting a top cryptocurrency (XRP, one of the largest cryptocurrencies by market value) in this way is unprecedented. Almost overnight, market sentiment around XRP became fearful. Many exchanges, especially those serving U.S. customers, have suspended or delisted XRP trading to avoid regulatory impact. Ripple's leadership has vowed to fight these charges, believing that the SEC's theory is misguided and that the agency did not issue a fair warning that XRP could be considered a security. The backdrop of this regulatory uncertainty and Ripple's determination to fight back will define the 'XRP vs SEC' legend in the coming months and years.

Ripple-SEC Legal Battle Key Milestone

To understand the trajectory of the litigation, here is the main court milestones and progress timeline in the Ripple litigation:

• On December 22, 2020, the Securities and Exchange Commission sued Ripple: The Securities and Exchange Commission has officially filed a lawsuit in the federal court in New York. The price of XRP has plummeted by over 50% in a few days as exchanges like Coinbase announced the suspension of XRP trading. Ripple has responded, stating that this move is an attack on the entire cryptocurrency industry.
• Early 2021 - Initial Conflict: Ripple won a procedural victory and gained access to internal documents at the U.S. Securities and Exchange Commission regarding the classification of cryptocurrencies. Ripple holders are allowed to submit amicus briefs. Ripple is rebounding along with the overall cryptocurrency market.
• 2021 Mid-Year - Discovery of ControversyRipple is seeking internal Securities and Exchange Commission documents, particularly those related to Ethereum's regulatory status. A court ordered the SEC to disclose drafts and emails, seen as a victory for Ripple.
• End of 2022 - Summary Judgment Motion: Both parties have applied for a judgment. Ripple believes that the SEC has failed to prove that the sale of XRP constitutes a securities issuance, emphasizing the lack of prior guidance.
• July 13, 2023 - Milestone ruling: Judge Analisa Torres ruled that XRP isnoSEC conducts programmed sales to retail investors but prohibits Ripple from selling directly to institutions. XRP skyrockets, delisted exchanges consider relisting.
• Adjustment after the ruling at the end of 2023The Securities and Exchange Commission sought an appeal but was denied an immediate appeal. The trial for the enforcement responsibility is scheduled for mid-2024.
• Early 2024 - Escalating Settlement Negotiations: Faced with a lengthy lawsuit, the two parties have begun serious settlement discussions. Ripple seeks favorable terms to minimize fines.
• March 2025 - Case resolution reachedRipple reaches settlement with SEC: Ripple to pay a $50 million fine, without admitting any wrongdoing, and SEC withdraws the appeal.

XRP and the latest updates on the SEC case (April 2025)

As of April 2025, the Ripple-SEC case seems to be coming to an end, with a settlement imminent. The joint motion to pause the litigation process has been approved. Ripple has confirmed that the SEC has decided to withdraw the appeal, reinforcing the court's ruling that XRP is not a security in secondary market sales.

The $50 million fine for Ripple will be escrowed, without admitting any wrongdoing, and released to the SEC. The outcome reflects Ripple's strength in litigation and broader regulatory shifts, as well as the US easing cryptocurrency enforcement across the industry in 2025.

The resolution of the case may have far-reaching implications: it establishes that secondary market transactions of XRP and other cryptocurrencies may not automatically constitute a precedent for securities trading. There is increasingly optimistic sentiment for future XRP financial products, such as potential ones.XRP ETF, now the regulatory clarity has been improved.

XRP Market Impact: Price Volatility and Investor Sentiment

The lawsuit of Ripple has dramatically impacted the price trend of XRP:

• December 2020Ripple plummeted by about 60% after being sued by the SEC.
• April 2021: XRP rallied sharply to $1.80, accompanied by the overall rise of cryptocurrencies.
• 2022: XRP moves sideways, reflecting the overall market weakness and ongoing legal uncertainty.
• July 2023: Ripple doubled within a day of a favorable court ruling.
• End of 2023SEC seeks appeal, volatility returns.
• Early 2025: XRP surged to above $2.00 and briefly touched $3.00 upon settlement news.

Gate.io and other international exchanges played a crucial role in maintaining XRP liquidity when trading was suspended on the U.S. platform.Trade XRP on Gate.ioRegulation is clear now.

XRP Price Prediction: Short-Term and Long-Term Outlook

short-term (next few months): Technical analysis suggests that before attempting a higher breakout, XRP may consolidate between $2 and $3. The support area is around $1.70-$2.00, with resistance near $3.00. If the bullish momentum continues, it may develop towards the previous all-time high levels (~$3.84).

Long-term (end of 2025 and beyond)If XRP adoption grows in cross-border payments and new financial products such as XRP ETF, XRP may target the range of 5-10 US dollars in the coming years. However, market cycles and macroeconomic conditions will also impact the outcome.

Cryptocurrency investors should continue to monitor the real-world adoption of Ripple, Ripple's business expansion, and global cryptocurrency market trends.

Conclusion

The lawsuit between Ripple and the SEC is a watershed event for the cryptocurrency industry. With a favorable resolution in hand, XRP has overcome one of its biggest uncertainties and regained momentum. Traders and investors can now move beyond the lawsuit and focus on the actual use cases and market adoption of XRP.

Trade XRP safely on Gate.ioAnd keep the opportunity to update as Ripple enters a new chapter of growth.