The United States Securities and Exchange Commission (SEC) is signaling an increasing focus on developing a clear cryptocurrency regulatory framework after ending one of the industry’s longest-running legal battles.
The SEC and Ripple Labs ended their almost five-year dispute after both parties filed to drop their legal appeals and bear their costs and fees, according to a filing last Thursday with the Second Circuit Appeals Court.
The case’s conclusion is a “welcome development” that ensures “minds once occupied with litigation now can concentrate on creating a clear regulatory framework for crypto,” said SEC Commissioner Hester Peirce in a Monday X post.
“With this chapter closed, we now have an opportunity to shift our energy from the courtroom to the policy drafting table,” said SEC Chair Paul Atkins in response to Peirce’s post. “Our focus should be on building a clear regulatory framework that fosters innovation while protecting investors,” he added.
Related: XRP tops $3 as Ripple case nears potential SEC dismissal
The SEC sued Ripple in December 2020, alleging the company raised $1.3 billion through unregistered XRP securities sales. In July 2023, Judge Analisa Torres ruled that XRP was not a security when sold to retail investors but was a security in sales to institutions. Ripple was fined $125 million in August 2024.
The end of the case comes as lawmakers advance the Digital Asset Market Clarity Act, known as the CLARITY Act. The bill aims to define the structure of digital asset markets.
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Push for the CLARITY Act
Republican lawmakers and the Senate Banking Committee aim to pass the bill by Sept. 30 despite growing signs of pushback from Democratic Party lawmakers.
Earlier in July, leading Democratic Party members in the House of Representatives announced a collective effort to oppose Republican efforts to pass so-called “dangerous” legislation, signaling deepening political division between the two sides of the aisle.
“[Republicans are] doubling down by fast-tracking a dangerous package of crypto legislation through Congress,” said House Financial Services Committee ranking member Maxine Waters, specifically criticizing the CLARITY Act and the Anti-CBDC Surveillance State Act, which seeks to prohibit the launch of a US central bank digital currency.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered