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Ripple vs SEC case, which concludes after nearly five years boosts the future of XRP ETF approval
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Possibility of XRP ETF approval has surged to 77% as the speculation of new firm to enter ETF market inetnsifies.
Ripple vs SEC case ends after nearly five years of legal battle. This landmark case will likely shape the future of XRP ETF approval, as currently the odds are surging around 77%. It boosted the market confidence and encouraged institutional interest with a clearer regulatory environment.
Several major asset managers, including Grayscale, Bitwise, and WisdomTree, have already filed XRP ETF applications. Now, the speculation is rising that BlackRock might enter the market soon.
Timeline of Ripple vs SEC Case
The US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs along with its CEO, Brad Garlinghouse, and co-founder, Chris Larsen. It accused the company of selling $1.3 billion worth of XRP tokens without registering them as securities.
Ripple countered with a motion to dismiss and challenged the SEC’s statements, arguing that XRP is a currency and not a security. Additionally, the court granted the SEC’s motion to extend the discovery deadline in June, allowing more time for the SEC to produce internal documents.
The presiding judge rules that the SEC should not withhold the Hinman documents, which could provide important insights into the SEC’s views on Bitcoin and Ethereum.
The US District Court ordered the SEC to hand over the Hinman documents. It included internal SEC communications, such as emails and drafts surrounding a 2018 speech by then Director of the SEC’s Division of Corporation Finance, William Hinman.
Judhe Analisa Torres ruled that Ripple’s institutional sales of XRP on the public exchange did not violate the securities laws. However, she found that institutional sales totaling $728 million sales disobeyed the rules.
The trial phase proceeded, focusing on testimony, financial documents, and remedies. Ripple submitted audited financial statements as ordered by the court,
Both the SEC and Ripple dropped their respective appeals of Judge Torres’s 2023 ruling. effectively finalizing the case.
Both parties agreed on a settlement and sought to lower the $125 million penalty against Ripple. However, the judge rejected this, emphasizing that Ripple must continue to comply with securities laws despite the SEC’s change in focus.
Ripple agreed to pay $125 million fine to the SEC as part of a settlement that ended the long-running legal battle. Of that, $50 million will go to the US Treasury, while $75 million—held in escrow since June—will be returned to Ripple.
This decision follows a mixed verdict, that XRP is not considered as security when sold on public exchanges to retail investors, but it is treated as a security for direct institutional sales.
What Are The Major Crypto Influencers Saying About This?
Ripple’s legal officer, Stuart Alderoty, said that the case is now behind them and Ripple can focus on business again. He stated on X, “Following the Commission’s vote today, the SEC and Ripple formally filed directly with the Second Circuit to dismiss their appeals. The end…and now back to business.”
Now, Bloomberg experts, Eric Balchunas and James Seyffart, hold a 95% odds of XRP ETF approval despite SEC Commissioner Caroline Crenshaw’s opposition to crypto ETF approvals.
What’s Next? Focus on XRP ETF Approval
The ending of SEC’s lawsuit against Ripple immediately changed the market sentiment, as the odds for XRP ETF approval rose to 77%. The conclusion of the legal battle addressed the uncertainties in the XRP and removed the obstacle from the path of ETF approval.
With regulatory clarity and renewed market confidence, the XRP price has also made a surge and reached $3.30. In less than 24 hours, XRP gained around 11%, climbing from $2.99 to $3.30. This increase in price pushed XRP’s market capitalization back above $180 million, re-establishing it as a top-five crypto by total value.
Is BlackRock Filing For an XRP ETF?
On August 8, the speculation about BlackRock filing for an iShares XRP Trust intensified. The investors and ETF community expected that the conclusion of SEC vs Ripple would fuel the XRP ETF application of other major firms.
ETF Store President Nate Geraci referred to the lawsuit dismissal, stating, “Yes, I think BlackRock was waiting to see this before filing for iShares XRP ETF. I’ll own it if I’m wrong.”
However, BlackRock denied the speculation, and a company spokesperson told the Block, “At this time, BlackRock does not have any plans to file an XRP or SOL ETF.”
