Ripple's prolonged legal conflict with the U.S. Securities and Exchange Commission (SEC) continues as it stretches into its fifth year. Optimism builds that a resolution may soon transpire, especially with the SEC's new administration potentially altering its stance on cryptocurrency. This shift could lead to a settlement in Ripple's case and progress regarding spot XRP ETF applications.
Despite recent leadership changes at the SEC, its legal standoff with Ripple persists.
The lawsuit dates back to December 2020 when the SEC accused Ripple of conducting an unregistered securities offering through XRP sales. Ripple has since secured partial victories, with the case nearing a resolution in August 2024.
At that time, Judge Analisa Torres ordered Ripple to pay a $125 million penalty for violating securities laws, much less than the initial $2 billion sought by the SEC. Ripple was prepared to settle, yet the SEC's appeal of a 2023 verdict has prolonged the case.
Legal observers speculate a settlement might occur soon. Jeremy Hogan, a noted American attorney, suggests that a resolution is likely before the potential approval of a spot XRP ETF in the U.S. He believes the ETF approval process might take longer due to its complexities.
Several prominent firms, including Grayscale, WisdomTree, Bitwise, and 21Shares, have shown interest in launching an XRP ETF in the U.S. According to Bloomberg's ETF research analyst James Seyffart, there is a 65% chance of such a product gaining approval before the end of 2025. Seyffart mentioned that the SEC might acknowledge some XRP ETF applications shortly. Hogan agreed that while approval could happen swiftly, the entire process could require 8-12 months.
Recently, Binance and the U.S. SEC jointly requested a 60-day pause in their lawsuit, aiming to issue a mutual status report to assess whether the stay should continue, as reported by Eleanor Terrett of Fox Business. This development has inspired hope among XRP supporters that a similar temporary truce between Ripple and the SEC could occur.
New SEC Chair Mark Uyeda's supportive stance towards the cryptocurrency industry also fuels these hopes. Uyeda's approach contrasts with that of his predecessor, Gary Gensler, who was viewed as a significant adversary to the digital asset sector due to numerous lawsuits during his leadership.