Brad Garlinghouse, the chief executive officer (CEO) of Ripple Labs, the issuer of the cryptocurrency XRP (Ripple), announced on the 19th that the U.S. Securities and Exchange Commission (SEC) will withdraw its lawsuit against the company.
Garlinghouse noted on that day on his social media platform X (formerly Twitter), "The moment we have been waiting for," adding, "SEC is withdrawing its appeal."
He emphasized, "This is a great victory for both Ripple and the cryptocurrency industry," and stated, "The future is bright. Let's create it together."
The lawsuit between Ripple Labs and the SEC is regarded as a representative lawsuit between the cryptocurrency industry and U.S. regulators. The SEC filed a lawsuit in December 2020, alleging that Ripple Labs sold XRP without registering it as a security and sought a penalty surcharge of $2 billion.
However, in July 2023, a New York district court ruled that "XRP is only subject to securities laws when sold to institutional investors and is not a security for the general public," significantly reducing the penalty surcharge to $125 million.
This was seen as virtually a victory for Ripple Labs. However, the SEC's appeal meant that the 'securities status of XRP' was passed to a higher court, which it has now decided to withdraw.
This lawsuit has acted as a limiting factor on the price of XRP for several years.
The SEC's withdrawal of the lawsuit against Ripple Labs has been anticipated following the election of Donald Trump, who positioned himself as pro-cryptocurrency, in last year's U.S. presidential election.
Garlinghouse is known as a leading figure in garnering industry support for President Trump alongside Brian Armstrong, CEO of cryptocurrency exchange Coinbase, during the U.S. presidential election.
According to Bloomberg News, following Trump's election, the SEC suspended or put on hold several legal lawsuits and investigations targeting major corporations in the cryptocurrency industry.
As news of the SEC's withdrawal of the lawsuit broke, the price of XRP surged.
As of 1 a.m. that day, Ripple was recorded at $2.56, having skyrocketed 13.93% from 24 hours earlier, according to CoinMarketCap, a global coin market tracking site.