Last Thursday, my Telegram pinged with a stat that made me choke on my coffee: it has been exactly 1,210 days since the SEC first sued Ripple Labs back in December 2020. That’s longer than the entire lifespan of many DeFi protocols I interview. And now—almost out of nowhere—Ripple has formally dropped its own cross-appeal against the agency. I spent the weekend combing through court dockets, re-reading Judge Torres’s July 2023 opinion, and DM-ing a few securities lawyers I trust. Here’s what shook out.
Here's What Actually Happened
Quick refresher, because the chronology can get messy:
- 22 Dec 2020 – SEC sues Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen for allegedly selling $1.3 billion in unregistered securities (the infamous XRP).
- 13 Jul 2023 – Judge Analisa Torres rules that programmatic sales on exchanges do not constitute securities offerings, but institutional sales do. XRP pumps from $0.47 to $0.93 in two hours—yes, I was staring at the Bybit chart the entire time.
- 18 Aug 2023 – Ripple files a cross-appeal, basically saying, “Hey, we still think those institutional sales shouldn’t be treated as securities either.”
- 3 Oct 2023 – Judge Torres denies the SEC’s attempt at an interlocutory appeal (i.e., an early appeal before trial). Market yawns; lawsuits are slow.
- 14 Mar 2024 – The two sides finish remedies discovery—a fancy way of calculating how big a fine Ripple might owe.
- 11 Apr 2024 – Ripple suddenly files to dismiss its own cross-appeal. The filing is two paragraphs long, no drama.
That’s what Stuart Alderoty, Ripple’s Chief Legal Officer, meant when he tweeted, “
We’re closing this chapter once and for all.” The internet ran with the quote, but the docket entry (ECF #1118, for the curious) is literally just a stipulation of dismissal. Dry as toast, yet huge in implication.
Why Ripple Folded Its Hand—My Best Read
I’ll be blunt: this surprised me. Just two months ago Garlinghouse was on stage at Paris Blockchain Week insisting, “We’ll fight every inch.” So what changed? Here are the three signals that popped out of the noise:
- Legal risk asymmetry. In my experience, cross-appeals are a double-edged sword. If Ripple lost, they’d cement institutional sales as securities nationwide, not just in the Southern District of New York. That’s the opposite of what they want while lobbying Congress for a friendlier framework.
- Settlement optics. Multiple lawyers I spoke with (yes, off-record) mentioned something called “Rule 68 cost shifting.” In plain English, Ripple could potentially get stuck with the SEC’s legal fees if they pushed the appeal and lost. We’re talking millions—money better spent on expansion in Dubai or Singapore.
- Time to focus on real business. XRP Ledger Hooks, the new smart-contract side chains, and that rumoured stablecoin product are all waiting. At some point, the lawsuit becomes an opportunity cost. I think the board finally said, “Enough.”
Could I be wrong? Absolutely. Maybe an internal memo showed their odds were just bad. U.S. appellate courts tend to defer to district judges on factual findings; overturning Torres on Howey factors wasn’t going to be easy.
So Does That Mean Ripple Lost?
Not exactly. Remember, the July ruling still stands: XRP itself is not a security when traded on secondary markets. That’s the gem most exchanges cared about. Coinbase, Kraken, and Bitstamp all relisted XRP within 48 hours of the ruling last summer, and volumes jumped 2.6× week-over-week (Kaiko data).
The part Ripple is conceding now is the $729 million in direct institutional sales (2013-2020). That slice is deemed a securities offering. The coming months will be about calculating disgorgement and civil penalties. The SEC’s opening salvo asked for $876 million; Ripple countered with—get this—$10 million. We’ll see where that lands, but even $100 million would be cheaper than an uncertain two-year appeal.
Now Here’s the Interesting Part: Market Reactions
If you watched the XRP/USDT pair on Binance the day the news dropped, you probably noticed… nothing. Price hovered around $0.62 and ended the day -0.5%. I was half-expecting at least a 5-7% pop. Turns out, traders had priced in legal headwinds long ago.
On-chain data told a different story. According to XRPScan, the number of new accounts funding rose to 2,413 on 12 April—a 34-day high. That’s small compared with Solana’s 50k daily newbies, but it suggests long-tail retail is peeking back in.
One more fun tidbit: Bybt funding rates for perpetual futures went slightly positive (+3 bps annualized). In English, shorts had to pay a tiny fee, meaning sentiment flipped bullish at the margins. Not huge, but directional.
What About the Bigger Picture—Does This Help Other Altcoins?
Probably, and here’s my working analogy: legal precedent is like lava. Once it cools, it forms the ground everyone walks on. Judge Torres’s July ruling is already hardened lava; dropping the cross-appeal keeps that lava in place instead of reheating it. Projects that sold tokens via exchanges—think Sushi, UNI, even the meme-coin flavor of the week—breathe a sigh of relief knowing the “programmatic sales ≠ securities” logic isn’t going back on the chopping block.
Gary Gensler, of course, won’t openly concede. He’s busy chasing Coinbase’s staking product and Kraken’s off-shore ops. But behind closed doors, lawyers now cite SEC v. Ripple Labs the way high-school debaters cite Wikipedia. It’s not Supreme Court weight, yet in district courts it carries persuasive heft.
Little Tangent: The Mystery of the ODL Numbers
While sifting through Ripple’s last quarterly report, I noticed something odd: On-Demand Liquidity (ODL) volume hit $3.1 billion in Q4 2023, down from $5.5 billion in Q2. That’s a 44% drop. Ripple blamed macro headwinds, but I suspect uncertainty around institutional-sales liability froze some banking partners. If the penalty phase wraps up with a tidy settlement, expect ODL to rebound, especially in Asia where corridors like PHP-JPY are already live.
Where Does This Leave Your Portfolio?
I’m not a financial advisor—my trading PnL can confirm—but here’s how I’m thinking:
- Risk-Reward on XRP: At $0.60, the July legal catalyst is old news. The next catalyst is penalty clarity. A sub-$100 million fine could nudge price toward the $0.80 resistance from August 2023.
- Watch the alt beta. ALT Beta (the ratio of TOTAL3 to BTC.D) ticked up 0.7% after the filing. Historically, XRP pumps spill over to mid-caps like XLM and ADA within three trading days.
- Regulatory dominoes. If Ripple settles, pressure mounts on the SEC to settle with Coinbase and Binance. That’s a macro tailwind for the whole sector.
But let me be totally transparent: I’ve noticed XRP’s social-media sentiment index (LunarCrush) is back in the “spammy” red zone. Whenever shill bots go wild, I trim exposure. Take that for what it’s worth.
Things That Still Confuse Me
1. Why didn’t Ripple push harder for a token-safe-harbor clause? Hester Peirce floated the idea in 2021.
2. Will secondary-market platforms be retroactively liable for facilitating the so-called institutional sales? The ruling isn’t crystal clear.
3. How does this interact with Europe’s MiCA regime? I keep emailing ESMA and getting boilerplate responses. Bureaucracy, man.
Community Pulse—Because This Isn’t Just Lawyers and Charts
I popped into the XRP Cafe spaces on X (formerly Twitter) Friday night. One user, @XRPGranny (yes, real handle), summed it up perfectly:
We’re tired, honey. Just give us clarity so we can go back to gardening—or, you know, price discovery.
Meanwhile, the r/CryptoCurrency subreddit was notably subdued. Most top comments were along the lines of, “Wake me when we get ETFs.” That tells me excitement has rotated to Bitcoin L2s and Solana meme-coin season. Fair enough, markets have short attention spans.
Where We Go From Here
The calendar matters:
- 22 Apr 2024 – SEC and Ripple submit joint briefing schedule on penalties.
- 29 Apr 2024 – Potential public version of the SEC’s penalty demand hits the docket.
- Early May – Judge Torres could sign off on a consent judgment if both parties reach a dollar amount. If not, trial on remedies set for 20 Jun 2024.
My gut says we get a number in May, Ripple pays it in XRP or USD (they hold north of 41 billion XRP in escrow, so liquidity isn’t a problem), and Garlinghouse launches that rumored USD-backed stablecoin by Q3. Ripple likes symbolic gestures; nothing screams “moving on” like a new product launch.
Final thought: Legal uncertainty is like fog. The moment it lifts, you realize the road was straighter than you feared—but you also notice new potholes ahead. Keep your seatbelt on.
Disclosure: I hold a middling bag of XRP picked up during the 2022 tax-loss harvest. This piece is for informational purposes, not financial advice. If you trade based on my caffeine-fuelled ramblings, you might end up poorer—and probably jittery.
