The United States Securities and Exchange Commission (SEC) is signaling an increased focus on establishing clear cryptocurrency regulations following the resolution of one of the industry’s longest legal battles.
The SEC and Ripple Labs recently ended their nearly five-year legal dispute, with both sides agreeing to drop their appeals and cover their own costs, according to a filing last Thursday with the Second Circuit Appeals Court.
SEC Commissioner Hester Peirce called the case’s conclusion a “welcome development,” noting that it allows attention to shift from litigation to creating a clear regulatory framework for crypto in a Monday post on X.
Responding to Peirce’s remarks, SEC Chair Paul Atkins said, “With this chapter closed, we now have an opportunity to move our efforts from the courtroom to the policy drafting table.” He added, “Our priority should be to develop clear regulations that encourage innovation while safeguarding investors.”
In December 2020, the SEC filed a lawsuit against Ripple, accusing the company of raising $1.3 billion through unregistered sales of XRP securities. In July 2023, Judge Analisa Torres ruled that XRP was not a security when sold to retail investors but was considered a security in sales to institutional buyers. As a result, Ripple was fined $125 million in August 2024.
The conclusion of the case coincides with lawmakers moving forward with the Digital Asset Market Clarity Act, or the CLARITY Act, which seeks to establish clear definitions for the structure of digital asset markets.
Push for the CLARITY Act
Republican lawmakers and the Senate Banking Committee are pushing to pass the bill by September 30, despite increasing opposition from Democratic lawmakers.
Earlier in July, leading Democrats in the House of Representatives announced a united effort to block what they called “dangerous” legislation, highlighting growing political divisions between the two parties.
“[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 aims to prevent the launch of a U.S. central bank digital currency.
