Ripple and SEC Nearing Resolution in Long-Running Legal Battle
The U.S. Securities and Exchange Commission (SEC) and Ripple Labs are reportedly moving toward a settlement in their legal battle, which has been ongoing since December 2020. According to sources familiar with the matter, the case is in its final stages, though negotiations over specific terms have caused delays. At the heart of the discussions is the $125 million fine imposed on Ripple in an August 2023 district court ruling, along with an injunction preventing the company from selling XRP to institutional investors. Ripple’s legal team is reportedly pushing for modifications to these terms, arguing that a settlement under the current conditions could imply an admission of wrongdoing. Ripple Pushes Back on SEC’s Position Two sources close to the negotiations say Ripple is questioning why it should still face penalties if the SEC is reconsidering past enforcement actions against other crypto firms. The argument hinges on the idea that if the new SEC leadership believes regulatory clarity is a more effective solution than litigation, Ripple should not be penalized under a shifting framework. The SEC initially sued Ripple in 2020, alleging that its sale of XRP constituted an unregistered securities offering. The case became a landmark legal battle, with Ripple securing partial victories along the way. Judge Analisa Torres ruled in 2023 that XRP’s programmatic sales to retail investors did not violate securities laws but upheld the SEC’s stance on institutional sales. Ripple now appears to be seeking a resolution that does not leave it burdened by legal restrictions while the regulatory landscape evolves. Impact on the Crypto Industry The case has broader implications for the cryptocurrency industry, particularly in how the SEC applies securities laws to digital assets. If a settlement is reached, it could set a precedent for other firms facing regulatory scrutiny. Observers note that the SEC has faced increasing pressure to provide clearer regulations rather than relying on enforcement actions. This shift in strategy may be contributing to the prolonged settlement talks. While no official timeline has been provided, sources indicate that both parties are working to finalize the agreement.
Coinbase Seeks SEC Spending Details on Crypto Investigations
According to renowned Fox Business journalist Eleanor Terrett, Coinbase has filed a Freedom of Information Act (FOIA) request seeking details on the U.S. Securities and Exchange Commission’s (SEC) spending related to cryptocurrency enforcement actions under former Chairman Gary Gensler. The request, filed Monday, aims to uncover financial and personnel data tied to non-fraud investigations of the crypto industry. FOIA Request Targets SEC Investigations Coinbase’s request covers the period from April 17, 2021, to January 20, 2025, and seeks records on SEC investigations and lawsuits concerning digital asset sales, secondary market transactions, staking, and lending. The company is asking for details on the number and names of enforcement actions, hours worked by SEC employees and contractors, and budget allocations for the agency’s Crypto Assets and Cyber Unit. Paul Grewal, Coinbase’s chief legal officer, said the request will promote transparency and accountability in regulatory oversight. He expressed hope that new SEC leadership would take a different approach to crypto regulation. SEC Yet to Respond The SEC has not issued a response to Coinbase’s FOIA request. The agency’s enforcement actions against the crypto industry have drawn criticism from industry participants who argue that the SEC has overstepped its authority. Coinbase itself has been involved in legal disputes with the regulator, including an old protracted lawsuit alleging that the company operates as an unregistered securities exchange. The FOIA request underscored tensions between cryptocurrency firms and federal regulators under Gary Gensler. It remains unclear whether the SEC will comply with Coinbase’s request or how quickly it will process the filing.
SEC Closes Investigation Into Robinhood Crypto With No Enforcement Action
The U.S. Securities and Exchange Commission (SEC) has officially ended the investigation into Robinhood Crypto (RHC) without pursuing any enforcement action. In a letter dated February 21, 2025, the SEC’s Enforcement Division informed Robinhood that it had concluded its inquiry following a Wells Notice issued to the company in May 2024. Robinhood Markets, Inc.’s Chief Legal, Compliance, and Corporate Affairs Officer, Dan Gallagher, expressed satisfaction with the outcome, stating, “We applaud the staff’s decision to close this investigation with no action.” Gallagher criticized the initial launch of the investigation, maintaining that Robinhood Crypto consistently complied with federal securities laws and did not facilitate transactions in securities. Regulatory Disputes Over Digital Assets The investigation centered on the classification of digital assets as securities, an area of ongoing debate between cryptocurrency platforms and regulators. Robinhood has consistently argued that most digital assets are not subject to federal securities laws. Unlike some competitors, Robinhood Crypto chose not to offer specific products and services that the SEC, under former Chair Gary Gensler, had suggested were securities. With the investigation now closed, Robinhood expressed a desire to engage with the SEC’s new leadership to develop a clearer regulatory framework for digital assets. The company called for “regulation by regulation” instead of “regulation by enforcement,” emphasizing the need for transparent and tailored rules for the digital asset industry. Looking Forward Amid Regulatory Uncertainty The closure of the SEC investigation marks a significant regulatory victory for Robinhood as it continues to navigate the evolving digital asset landscape. The company remains focused on innovating its products and services while advocating for clearer regulatory guidelines. The SEC’s decision not to pursue enforcement action allows Robinhood to move forward without legal hindrances. As the company seeks to influence digital asset regulation, industry stakeholders will be closely watching for any new developments in the regulatory approach taken by the SEC under its current administration.
