On August 22nd, the US Court of Appeals for the Second Circuit formally endorsed the dismissal of all appeals pertaining to the legal case between Ripple and the Securities and Exchange Commission (SEC).
A court document, shared on X (formerly Twitter) by attorney James Filan, effectively brings closure to one of the cryptocurrency industry’s most significant legal battles.
Despite this news, the price of XRP saw a minimal increase, rising less than 1% in the hour following the announcement, trading at $3.0694 at the time of reporting.
The dismissal follows a joint agreement filed on August 7th, where both Ripple and the SEC consented to conclude their respective appeals subsequent to an official vote by the Commission.
This agreement signals the end of a contentious period that began in December 2020. At that time, the SEC initiated legal action against Ripple Labs, along with its CEO Brad Garlinghouse, and co-founder Chris Larsen, alleging that they had conducted an unregistered securities offering through sales of XRP.
Legal Dispute Ends; ETF Approval Chances Remain Positive
According to court documents outlining the settlement terms, XRP will not be classified as a security – a substantial win for Ripple. Each party will be responsible for covering their own legal expenses.
Ripple’s Chief Legal Officer, Stuart Alderoty, previously characterized the agreement as the closing of a chapter that had cast a shadow over the cryptocurrency sector for almost four years.
This resolution positions Ripple alongside other cryptocurrency enterprises, such as Coinbase, that have successfully navigated enforcement actions with the SEC. Furthermore, it clarifies the regulatory landscape surrounding XRP’s status, thereby sustaining high expectations for the approval of XRP exchange-traded funds (ETFs).
In February, Bloomberg ETF analysts Eric Balchunas and James Seyffart estimated a 65% probability of spot XRP ETFs being approved in the United States.
In early June, Polymarket bettors placed the odds of such an approval occurring this year at 98%, followed by a 10% decrease after the SEC postponed decisions on several filings within the same month.
Despite the decline in odds on the crypto-based prediction platform, Balchunas and Seyffart increased their odds to “90% or higher” on June 20th.
Polymarket traders continued to disagree with the analysts, reducing the odds to 62% in early August after news emerged that Commissioner Caroline Crenshaw opposed the approval.
However, Balchunas reaffirmed the high likelihood of XRP ETFs being approved:
“Interesting to see Polymarket odds of XRP ETF approval drop to 62% after vote disclosures showed Crenshaw voting no. However, a) she’s going to vote no on EVERYTHING, and b) it’s inconsequential; she’s outnumbered. We haven’t changed our odds; we remain at 95%.”