SEC Drops Ripple Appeal, Solidifying XRP’s Legal Standing and Shifting Market Sentiment

The U.S. Securities and Exchange Commission (SEC) has officially dropped its appeal against Ripple Labs, bringing to a close one of the most high-profile legal battles in the history of cryptocurrency regulation. The decision, made public on May 5, 2025, effectively affirms the earlier court ruling that XRP is not a security when sold on public exchanges. For traders and investors alike, the move eliminates a major overhang and injects fresh momentum into the broader crypto market, particularly for assets widely traded on CFD platforms.

The SEC’s original lawsuit, filed in December 2020, alleged that Ripple’s XRP token was sold as an unregistered security. A partial ruling in July 2023 dealt a blow to the agency, with U.S. District Judge Analisa Torres finding that XRP sales on public exchanges did not constitute securities transactions—although institutional sales were deemed to fall under securities law. Ripple was fined $125 million in that context, but the most damaging legal uncertainty was effectively lifted.

Now, with the SEC abandoning its attempt to overturn the ruling, Ripple’s legal position is more secure than at any point in the last four years. The company announced that the settlement would result in the return of $75 million of the original fine, with the remaining $50 million paid as part of the agreed terms. Ripple’s Chief Legal Officer Stuart Alderoty confirmed that the SEC would also be asking the court to lift the longstanding injunction that had restricted parts of Ripple’s business operations in the U.S.

XRP responded instantly to the development, climbing roughly 11% on the day to trade around $2.55. The price action reflects renewed institutional and retail interest following the removal of regulatory ambiguity. Liquidity in XRP trading pairs improved notably across major exchanges, and several CFD brokers reported a spike in trading volume.

More broadly, the SEC’s retreat fits into a growing pattern under the current administration, which has adopted a less confrontational stance toward major crypto firms. Cases against Coinbase, Kraken, and several decentralized platforms have been scaled back or dropped in recent months, suggesting a shift in regulatory strategy. That shift is now being priced into the market.

For CFD traders, the outcome provides a clearer framework for trading XRP without the looming threat of a future SEC enforcement action. Volatility around the token may persist in the short term, but the legal risk premium that had weighed on XRP for years has now been materially reduced. It also creates space for more aggressive positioning, especially on news-driven trades or technical setups involving XRP pairs.

The decision has ripple effects—pun intended—across other cryptocurrencies that have faced similar scrutiny. While Bitcoin and Ethereum were never officially classified as securities by the SEC, dozens of other altcoins have operated in a gray area. With the Ripple case now concluded, market participants are reassessing the likelihood of future enforcement actions and adjusting exposure accordingly.

Tips for Traders:

• Watch XRP/USD and XRP/EUR pairs for continued volatility, particularly as trading volume normalizes and institutional desks re-enter.

• Keep an eye on sentiment spillover into altcoins with similar legal histories. Tokens like ADA, SOL, and ALGO may see sympathy moves.

• Monitor the U.S. regulatory calendar for further policy announcements. The SEC’s withdrawal from litigation could signal upcoming rule-based frameworks, which would be critical for the structure of crypto CFD offerings.

• Look for liquidity shifts on major CFD platforms that offer XRP. Expanded access and tighter spreads may present new short-term trading opportunities.