Why is the Ripple SEC case still going on in the ocean of solutions?

The Securities and Exchange Commission (SEC) has been fired in recent weeks. First Coinbase, then Consency, Gemini, Opencey. Yesterday it was Kraken. One by one, virtually all the well-known enforcement measures of the time of former SEC Chairman Gary Gensler have fallen.

This is shown in the cryptocurrency industry that US President Donald Trump’s administration will not govern like last. In fact, Commissioner Hester Perth, who is now head of the SEC’s Cryptographic Task Force, has issued an official statement explaining that the SEC is no longer regulated by enforcement.

“The decision by the previous committee to transfer this function to the enforcement department by enforcement by enforcement has hurt the American people, has had a negative impact on the industry and has hampered the ability to use expertise intended for use by the committee’s skilled and dedicated professional staff.”

But one case is the bevy of fire, that is, the nasty, unusually unremarkable. Of course, in that case it’s a ripple.

The origin of the ripple case

Ripple Case is one of the oldest and most influential cryptography. Back in the 2010s, when cryptography was still young, the SEC was dipping its toes into enforcement. It started with “The Dao Report.” This is an original document that first applies the now-known Howey test to Cryptocurrency.

Then in December 2020, Ripple’s complaints came as shots crossing the bow of a crypto facility. The sale of Ripple’s token XRP is “providing long-standing unregistered securities,” allegations that it will form a playbook for all subsequent SEC enforcement actions.

It seems strange now, but the Ripple incident preceded former Presidents Joe Biden and Jensler. It came in the final months of the first Trump administration when Jay Clayton was still an SEC chair. For a while, this made it weird. In the quaint and quaint period when Gensler was recognized as a “procrypt” commissioner, XRP remained a strange pie for years. Under the regulations, tokens were not available in many US central exchanges, which missed the 2021 and 2022 boom years.

As the first major cryptographic case, Ripple’s ruling will have a great influence on the industry’s legal stance. Most notably, the 2023 summary judgment award, which found that Judge Analisa Torres granted a partial victory to the company and that XRP’s blind vidac sales “didn’t derive any profit expectations” (because the buyer didn’t recognize it) did not constitute a securities because they were not aware of the purchase of XRP from Ripple.

At the time, this was considered a major victory for cryptocurrency. The SEC tried and failed to certify the Dialogue Association’s appeal, and for the following years the lawsuit fell slowly, passing a $125 million ruling against Ripple last August.

Ultimately, prominent disputes with Coinbase, Uniswap and others have deprived the ingenious cryptocurrency enforcement action in the public eye. In one of the last acts of the Biden administration to step down, the Gensler SEC appealed to Torres’ ruling on January 15, 2025. Ripple filed a cross appeal notice on October 15, 2024 and has not yet filed an appeal.

Ripple matches the White House

At the time of writing, the Ripple case has been silent since January 31, 2025. The SEC systematically dismissed virtually all cryptocurrency actions and investigations on its docket, but Ripple is mysteriously stuck.

This is odd on some levels. For one, the Ripple appeal argument is similar to the problematic argument in the parallel Coinbase inter-appeal that Judge Catherine Polk Fila of the Southern District of New York was recognized in January. The SEC dismissed the case on February 27, 2025 and let it go.

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Second, Ripple appears to be in the good bounty of the White House. Ripple has publicly sought Trump’s favor in recent months. This reported meetings between Ripple CEO Brad Garlinghouse and Trump at Mar-a-Lago before his inauguration, as well as XRP’s $5 million contribution to Trump’s inauguration fund.

It is certainly impossible to know, but these gestures seem to inspire warm emotions among the inner circles of the Magazine. In February, Trump’s son, Donald Trump Jr., followed X’s Ripple. Most recently, on March 2, Trump designated XRP as one of five cryptocurrencies in a strategic cryptocurrency.

In light of its widespread recognition as the Client List White House, this all suggests that Ripple should be lined up first in favor of the SEC. However, the case remains unresolved. Perhaps what is going on?

3 Reasons Why Ripple Case Is In progress

The truth behind the Ripples’ mystery is that it is unclear why the case is still pending. SEC staff or Ripple’s attorneys have not commented. However, there are several explanations worth considering.

Unlike Coinbase, which was still pending before its release, Ripple reached a final decision. This means that if the SEC halts the battle, the outcome is not a Ripple victory, but a $125 million fine and a five-year “bad actor” ban on security funding Judge Torres imposed on Ripple.

This means, in a way, that Ripple needs a case to continue its favorable judgment. It is possible that they will persuade Torres to join the SEC in order to free himself of his judgment, but it is not clear that Torres agrees to do so.

Legal commentator James Murphy recently speculated.

“While Torres’ decision was undoubtedly a question for $XRP holders, the discovery of (a) a securities law violation and (b) an injunction (with the accompanying “bad boy” provision) is not that great for ripples,” Murphy said. “This is especially true if Ripple is considering offering future exemption securities or IPOs.”

“The SEC believes that both sides have rejected the appeal and that the SEC has accepted a settlement that will receive a $125 million penalty. So it makes sense (at least to me) that Ripple may be negotiating for a better deal.”

Ripple may be playing hardball, but will Trump allow the SEC to be pushed back? Another high-risk tactic is for parties to carefully agree to continue the issue of appeal, but the SEC is as a nameless party. The SEC could die at a hearing and effectively improved the Ripple probability of obtaining a favorable judgment regarding appeals in the Second Circuit.

A similar tactic was famously used by the Justice Department (openly and violently) during President Barack Obama’s term.

It may fit some facts, but this explanation is also incomplete. After all, the SEC was able to promote reviews without maintaining its appeal at the same time. If it was really trying to support a legitimate victory of ripples, why not drop its own appellant case? This approach also risks adverse consequences on the second circuit, potentially giving better ripple than in August.

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The ultimate explanation that makes sense is that there are still voices in the SEC who care about interpreting the law and want to defend it. At the time of Torres’ ruling, many practitioners believed it was misapplied to the securities law. Cryptocurrency lawyers have come to embrace that logic, but it is clear that the SEC has always deemed it a black spot in the litigation record and fought hard to sue immediately.

SEC lawyers choose their profession because they care about the integrity of US financial markets. There could also be still voices within the committee that will undermine its mission by ensuring that Lippill’s ruling does not challenge.

Perhaps these voices are waiting for incoming SEC chair Paul Atkins to be confirmed before he makes a decisive decision about the ripple incident.

Ultimately, this case is a trace of an earlier era. Case law was once considered a determinant of the legal status of cryptocurrency tokens, but this may not be the case anymore. When Trump came back to power, the old rules were dumped, and the new rules were not written yet. Ripple cases will likely be removed in the coming days as the SEC works through the docket or the aspects arrive at some sort of agreement. However, even if this continues to resolve, it is unlikely to affect execution over the next four years.

During the Trump era, it appears that regulations are carried out through transactions rather than through law.

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