SEC Likely to Drop Ripple Appeal, Former Official Predicts

A former SEC official, John Reed Stark, has suggested that the SEC could soon drop its appeal in the high-profile Ripple lawsuit. The case, which has dragged on for years, centers around whether Ripple’s XRP token should be classified as a security. Stark’s prediction comes amid a broader trend of the SEC stepping back from aggressive enforcement in the crypto space. This shift in strategy includes the agency dropping cases against major platforms like Uniswap Labs, and OpenSea.

Stark highlighted the SEC’s recent decisions, such as its cessation of appeals regarding the classification of crypto businesses as securities dealers. Under acting SEC Chair Mark Uyeda, the SEC has paused multiple crypto-related litigations, setting a new record with five such pauses in just a few days. This action reflects a significant departure from the SEC's previous aggressive posture under former Chair Gary Gensler.

The Ripple case may be the next to see this shift in strategy. Stark pointed out that the SEC has clarified it will not pursue new cases that classify digital assets as securities until its internal crypto task force completes its regulatory framework. This could lead to a resolution of the Ripple case, with some speculating that the agency may agree to reduce the penalty before eventually dismissing the case altogether.

Along with these developments, the SEC has recently closed investigations into both Uniswap and OpenSea, which many view as a victory for the crypto community. These actions signal a potential turning point in the SEC’s relationship with the crypto industry, which could set the stage for a more balanced and crypto-friendly regulatory environment in the future.