KeyTakeaways:
- SEC halts legal actions against major crypto firms, signaling shift in enforcement strategy.
- Ripple lawsuit complexity increases as previous court rulings complicate dismissal.
- SEC’s crypto task force awaits regulatory guidance, delaying decisions on Ripple case.
The U.S. Securities and Exchange Commission (SEC) has been shifting its approach to enforcement actions against crypto firms. Legal experts suggest that the SEC could soon dismiss its ongoing lawsuit against Ripple. However, the complexity of Ripple’s existing court judgments complicates the matter, as the SEC awaits regulatory clarity from its new crypto task force.
Recently, the SEC has moved to drop several enforcement cases against major crypto entities, signaling a possible shift in its regulatory approach. The commission has halted legal proceedings against companies such as Coinbase, Binance, Uniswap, and OpenSea. These actions highlight a changing stance, where the SEC’s new leadership, under Acting Chair Mark Uyeda, appears to prioritize regulatory reviews over aggressive enforcement.
Additionally, the SEC has withdrawn appeals concerning the status of crypto businesses as securities dealers, further reinforcing the idea that the agency may be adopting a more cautious approach toward the crypto industry. Under this new leadership, the SEC has suspended five litigation cases involving cryptocurrencies and is waiting for an assessment from the crypto division headed by Commissioner Hester Peirce.
Ripple’s Lawsuit and Court Ruling Complicate Matters
The ongoing lawsuit against Ripple is particularly complex. While the SEC has dropped other crypto cases, Ripple’s situation remains unresolved. A previous court ruling dismissed claims that Ripple’s programmatic sales of XRP were securities. However, Ripple was fined $125 million for sales made to institutional buyers, and an injunction was imposed to restrict future institutional sales.
Given this ruling, legal experts believe that a dismissal of the Ripple case might require additional negotiations between Ripple and the SEC to settle on other penalties. The SEC had previously filed a motion to dismiss its appeal just before former Chairman Gary Gensler’s departure.
Ripple is expected to respond to the motion in April 2025. Legal experts note that the dismissal process for Ripple is more prolonged than that for other crypto cases, likely due to the final court judgment.
SEC’s New Crypto Task Force and Regulatory Uncertainty
The SEC’s enforcement policies are currently in a state of flux. The agency has recently wrapped up investigations into other crypto projects, including Robinhood and Coinbase, signaling an end to some ongoing probes. These decisions come as part of a broader shift in policy, which many attribute to changes in leadership and the formation of a new crypto task force.
As the SEC waits for direction from this task force, which is expected to issue recommendations on crypto regulation, the outcome of the Ripple lawsuit remains uncertain.
