The Ripple vs SEC case has been a long and messy legal fight—stretching over four years since it began in 2020. What started as a dispute over XRP has turned into one of the most important cases in crypto history. It’s no longer just about Ripple. It’s about whether the U.S. government should have the authority to define how the entire crypto market works.
Here’s a quick breakdown of how it all began, who’s been in the mix, the key moments, and where things stand now in April 2025.
Who’s Ripple, and What’s XRP All About?
It all started back in 2012 when Chris Larsen and Jed McCaleb launched Ripple Labs in San Francisco. Their mission? To make sending money across borders faster and way more affordable. They wanted to shake up how global payments happen.
Their plan? Use blockchain tech to make payments lightning-fast and dirt-cheap. The star of the show was XRP, a digital coin designed to act like a go-between for banks and financial companies sending cash across borders. Think of it as a super-efficient middleman.
By 2020, Ripple was a big deal. They’d teamed up with major players like MoneyGram and Santander, and XRP was one of the top cryptocurrencies, worth billions. Ripple was out there shaking up the financial world, and it looked like they were unstoppable. But then the SEC crashed the party.
SEC vs Ripple Lawsuit: Why they sued?
Just before the holiday break on December 22, 2020, the SEC hit Ripple with a lawsuit. They accused the company of raising $1.3 billion by selling XRP without registering it as a security. They said this went all the way back to 2013.
To back up its case, the SEC pointed to the Howey Test, a legal standard from 1946. The test defines a security as something where people invest money with the expectation of earning a profit, and that profit is reliant on the work or efforts of others.
The SEC wasn’t just mad at Ripple. They went after CEO Brad Garlinghouse and co-founder Chris Larsen, saying they made $600 million selling XRP themselves, all without following the rules. The SEC’s argument? Ripple was selling XRP like it was stock in the company, but they never gave investors the full scoop on risks or finances.
Ripple was blindsided. They fired back, saying XRP’s no security—it’s a currency, like Bitcoin or Ethereum, which the SEC had already said were okay. XRP was traded on hundreds of exchanges worldwide, used for real payments, and wasn’t controlled by Ripple alone. Plus, the U.S. government had called XRP a virtual currency years earlier. So, what gives?
Where and When It All Began?
The lawsuit hit right before Christmas in 2020, and it landed in the Southern District of New York — the same court that handles Wall Street’s biggest cases. Judge Analisa Torres was assigned to lead the case, while Judge Sarah Netburn handled all the behind-the-scenes stuff like evidence disputes.
The timing raised eyebrows. Jay Clayton, who was about to step down as the head of the SEC, filed it on his way out the door. With a new administration just days away, a lot of people saw it as a deliberate move — maybe even a political one.
XRP’s value crashed almost instantly. Within days, the price was nearly cut in half. Big-name exchanges like Coinbase and Kraken didn’t wait around — they pulled XRP from trading, leaving regular investors stuck with tokens they couldn’t sell. It was chaos. Ripple knew this wasn’t going to be a quick fight, and the crypto world was already taking sides.
What followed was a legal slugfest that stretched over four long years, full of twists, reversals, and high-stakes drama. Here’s how it all went down, step by step.
2020: The Fight Starts
December 22, 2020: The SEC sues Ripple, Garlinghouse, and Larsen, saying their XRP sales since 2013 were illegal. They want Ripple to stop selling, pay back the money, and face fines. XRP’s price nosedives, and the crypto world’s in chaos.
John Deaton, a lawyer and XRP holder, starts speaking out, saying the SEC’s going after regular folks who bought XRP, not just Ripple. He’s pissed that exchanges are delisting XRP, tanking its value for small-time investors like him.
2021: Early Punches
January 2021: Ripple comes out swinging, saying XRP’s a currency, not a security. They point out that Bitcoin and Ethereum got a pass from the SEC, so why not XRP? They call the SEC’s rules inconsistent.
Deaton jumps in, blasting the SEC for hurting XRP holders. He starts digging into whether SEC bigwigs like Jay Clayton had shady ties to Ethereum, calling it “ETH-Gate” and hinting the lawsuit might be a setup to favor Ripple’s competitors.
February 2021: Deaton, a former Marine turned crypto lawyer, files a motion to join the case as amicus curiae—a friend of the court—representing himself and thousands of XRP holders. He says the SEC’s lawsuit screws over regular people who use XRP for payments or trading, not just Ripple’s big deals.
Eventually, he’s speaking for over 75,000 XRP holders, making them part of the fight. The court doesn’t let him fully intervene, but his briefs give XRP fans a voice, and he’s rallying the community like a coach hyping up a team.
March 2021: Judge Netburn gives Ripple a win, letting them see the SEC’s internal emails about Bitcoin and Ethereum. It’s a hint that the SEC might’ve been playing favorites.
Deaton cheers this on, saying it could expose the SEC’s double standards. He’s already tweeting up a storm, keeping XRP holders in the loop and calling the lawsuit a “bogus” attack on retail investors.
April 2021: Gary Gensler takes over as SEC Chair and keeps the heat on, pushing to block Ripple’s access to internal SEC docs. He’s all in on treating XRP as a security, setting the tone for a tough fight.
August 2021: Ripple digs deeper, asking for documents tied to William Hinman, a former SEC bigshot who said in 2018 that Ethereum wasn’t a security. They think these could show the SEC has been flip-flopping.
April 2021: New SEC Chair Gary Gensler takes over and comes out swinging, doubling down on the Ripple lawsuit. He pushes to block Ripple’s request for internal SEC emails, including stuff on officials’ personal devices, showing he’s not backing off Clayton’s fight. Gensler’s all about treating most cryptos like XRP as securities, and he’s ready to keep the pressure on.
2022: Things Get Spicy
January 2022: Judge Netburn lets Ripple peek at more SEC emails, though the SEC tries to hide some, claiming they’re private. Ripple’s getting ammo to challenge the SEC’s logic.
October 2022: A huge moment—Judge Netburn orders the SEC to hand over the “Hinman documents.” These emails show the SEC’s internal debates about crypto, and Ripple hopes they’ll prove the agency has been inconsistent.
November 2022: The SEC scores a point when they win a case against another crypto company, LBRY, which spooks the market and dips XRP’s price. But Ripple and Deaton keep pushing, with Deaton filing a brief arguing XRP exchange trades aren’t securities. Gensler doubles down, saying most cryptos are securities, keeping Ripple in the hot seat.
2023: A Game-Changer
June 2023: The Hinman documents finally come out, and they’re a doozy. They show SEC staff arguing over what makes a crypto a security, making the agency look like it’s making it up as it goes. Deaton’s stoked, saying they prove the SEC played favorites with Ethereum.
July 13, 2023: Judge Torres drops a bombshell ruling:
Win for Ripple: XRP sales on public exchanges (called “programmatic sales”) aren’t securities. People buying XRP on Coinbase weren’t investing in Ripple directly, so no Howey Test violation.
Loss for Ripple: Sales to big institutional investors are securities, and Ripple broke the law by not registering them.
This half-and-half decision is massive. XRP’s price shoots up, and exchanges like Coinbase and Kraken return XRP.
XRP’s price soars, and exchanges relist it. Deaton hails the retail win, saying his briefs helped protect XRP holders, but notes the institutional ruling’s a hurdle. Gensler’s bummed, saying he’s “disappointed” with the retail part and eyeing an appeal, sticking to his view that crypto needs tight rules.
August 9, 2023: The SEC filed for an interlocutory appeal to challenge the judge’s ruling that Ripple’s XRP programmatic sales to the public did not violate securities laws.
October 2023: The SEC tries to appeal early, but Judge Torres says no dice. They also drop the charges against Garlinghouse and Larsen, narrowing the fight to Ripple’s institutional sales. Deaton calls it a retreat, crediting XRP holder pressure. Gensler takes heat, with Ripple’s legal chief Stuart Alderoty slamming his “investor protection” talk as fake.
2024: Money Talks and Appeals Fly
March 2024: The SEC demands a crazy $1.95 billion penalty—$876 million to repay profits, $198 million in interest, and another $876 million for kicks. Ripple calls it overkill and pushes back.
August 7, 2024: Judge Torres sets the fine at $125 million, way less than the SEC wanted. Ripple gets slapped with an injunction to avoid future violations and a “bad actor” tag that limits some fundraising. The SEC can’t prove investors lost money, so no repayment’s ordered.
October 2024: The SEC appeals to the Second Circuit, unhappy with the programmatic sales ruling. Ripple counters with its own appeal, saying the institutional sales fine is unfair. Meanwhile, Ripple’s Singapore branch scores a license, showing they’re not slowing down.
Deaton files as amicus counsel, pushing to keep XRP trades non-securities. Gensler’s “regulation-by-enforcement” draws fire from Garlinghouse, who calls him a “liability” for killing innovation.
2025: The Finish Line
January 2025: Gensler’s SEC files its final appeal brief, claiming XRP sales are securities. Ripple’s team trashes it as a waste, with a pro-crypto government coming. Gensler exits January 20, replaced by crypto-friendly Paul Atkins.
The Second Circuit tells the SEC to wrap up its arguments. Then, weirdly, the SEC pulls the Ripple case from its website, making people think it’s over. Turns out, it’s just because the case is now in the appeals court.
February 2025: The SEC starts backing off crypto cases, pausing its fight with Binance. With Trump back in office and a new SEC boss, Mark Uyeda, the vibe’s more crypto-friendly.
March 19, 2025: Brad Garlinghouse tweets that the SEC is dropping its appeal, calling it a “huge win.” XRP’s price jumps 10% to $2.49. The SEC stays quiet, but the news feels legit.
March 24, 2025: The deal’s done. The SEC keeps $50 million of the $125 million fine, refunds the rest, and asks to lift the injunction. Ripple drops its appeal, and both sides are ready to call it quits.
April 2025: Ripple files a final brief in the Second Circuit, cleaning up loose ends. The case is basically over, just waiting for the court’s final stamp.
The Key Players
Brad Garlinghouse
Ripple’s CEO, a fiery leader who became the face of the fight. He was personally sued but cleared in 2023, and his tweets kept the crypto community hyped. He slammed Gensler as a “liability” for his anti-crypto crusade.
Chris Larsen
Ripple’s co-founder, was also sued by the SEC. He stayed quieter but was a big part of the defense strategy.
John Deaton
Crypto lawyer who fought for 75,000 XRP holders as amicus curiae. His briefs argued XRP’s not a security, helping win the 2023 retail sales ruling and cut the fine from $2 billion to $50 million. He rallied the community on X and CryptoLaw, calling out SEC favoritism, all pro bono.
Judge Analisa Torres
The no-nonsense judge who made the big 2023 ruling, balancing Ripple’s wins and losses.
Judge Sarah Netburn
Handled the evidence fights and gave Ripple key wins, like the Hinman documents.
William Hinman
Former SEC director whose 2018 Ethereum comments and emails became a centerpiece of Ripple’s defense.
SEC Chairs
Jay Clayton kicked off the lawsuit. Gary Gensler (2021–2025) cranked up the heat, pushing XRP as a security and appealing the 2023 ruling. His “regulation-by-enforcement” flopped with the appeal’s collapse under Mark Uyeda, who closed the case.
What does this mean for crypto?
This case was more than a Ripple problem—it’s a turning point for crypto. Here’s why it matters:
Some Clarity, Finally
The 2023 ruling said retail XRP sales aren’t securities, which is a big deal for other cryptos. But institutional sales need SEC approval, so companies have to be careful.
Money and Markets
Ripple shelled out $150 million on legal fees and paid a $50 million fine. XRP’s price? A wild ride—dropping in 2020, soaring in 2023, and hitting $2.50 in 2025. Investors are excited, and firms like Bitwise are jumping in with XRP ETFs.
Crypto Sticks Together
The industry rallied behind Ripple. Coinbase, Kraken, and others filed briefs, and XRP’s relisting was a win for everyone. It showed crypto can fight back.
Politics Matter
The case started under Trump, dragged through Biden’s tough-on-crypto years, and ended under Trump’s pro-crypto comeback. The SEC’s new vibe helped Ripple and others like Coinbase dodge bigger fights.
The Bigger Picture
This fight wasn’t just about XRP—it’s about who gets to control crypto. The SEC’s old-school Howey Test doesn’t quite fit decentralized coins, and the Hinman emails showed the agency was winging it. Ripple’s win (well, mostly win) gives crypto a playbook: retail sales might be safe, but big investor deals need paperwork.
Deaton made sure the court saw how the SEC hurt regular folks, setting a precedent for crypto fights. Gensler’s sue-everything approach made him crypto’s bad guy, and his exit flipped the script.
Globally, Ripple’s killing it, with licenses in places like Singapore, while the U.S. is still figuring out its rules. The case lit a fire under Congress to maybe write actual crypto laws instead of letting the SEC play cop. For investors, XRP’s back in the game, and Ripple’s even talking about going public.
Where we stand in April 2025
Right now, the case is all but done. The SEC’s keeping $50 million, Ripple’s getting the rest of the fine back, and the injunction’s likely gone soon. The Second Circuit’s just crossing t’s and dotting i’s. Garlinghouse is already pitching XRP for a U.S. crypto reserve, riding Trump’s crypto-friendly wave.
My Take
This was a crypto soap opera—heroes, villains, and a courtroom showdown. Ripple took on the SEC and came out swinging. Deaton was the people’s champ, fighting for XRP holders and sticking it to the SEC. Gensler played the heavy, throwing lawsuits like punches, but his exit let crypto breathe.
The U.S. still needs better rules, but Ripple’s standing tall, and crypto’s got some wind in its sails. Whether you’re holding XRP or just here for the drama, this case was one for the books.
Also Read: He Sold His Litecoin, Kept His Vision – The Charlie Lee Story
