Former SEC Official Clarifies How Ripple Prolonged the XRP Lawsuit

A former SEC official has clarified that Ripple, not the Commission, was the driving force behind this year’s prolonged appeals process. The general public perception was that the SEC was dragging its feet. 

Now, with both sides moving to end litigation, the final resolution is likely close. 

Ripple and the SEC in Court

The Ripple vs SEC case was a landmark crypto enforcement action, and it ostensibly should’ve ended in March. However, a lingering cross-appeal and attempted settlement stayed in the news for months.

Marc Fagel, a former SEC regional director and longtime securities litigator, addressed growing speculation by explaining that Ripple initiated a failed attempt to renegotiate the court’s remedies. 

The firm sought to vacate an injunction and reduce its $125 million penalty. However, the judge rejected these terms outright.

“The parties originally tried to settle the case on terms that made dismissing the appeals contingent on the court vacating the injunction and reducing the penalty,” Fagel wrote. “The court refused. So they had to restart the process.”

Essentially, the SEC under Gary Gensler forbade Ripple from selling securities to non-institutional investors. Now that the Commission is under new management, the firm attempted to remove this prohibition.

This process led to months of continued litigation and court appearances, only wrapping up in late June.

In hindsight, a few pieces of circumstantial evidence support these claims. For example, two weeks before Ripple and the SEC closed the cross-appeal, they filed a joint request to continue the court process.

At the time, legal observers noted that the filing seemed half-hearted, failing to address the judge’s key concerns. This may have signified diminishing investment in the battle.

Clarifying the Gensler-Era Injunction

The core issue this year comes from a Gensler-era injunction barring Ripple from conducting institutional sales of XRP without SEC registration. Ripple attempted to remove this injunction after the 2024 US election ushered in new leadership at the Commission under Chair Paul Atkins.

However, the legal system does not move as fast as political sentiment. Fagel stressed that the delays seen in 2023 and early 2024 were routine in complex federal litigation, not part of any deliberate stalling tactic by the SEC.

There was a (very small) chance the original approval vote encompassed dismissal even without the modification of the injunctive order. Given the delay, seems pretty clear that was not the case, so we're presumably still waiting on another vote.

— Marc Fagel (@Marc_Fagel) August 4, 2025

What’s Next: Final Resolution Expected August 15

The final step in the case is procedural. Both sides must submit formal filings to withdraw their appeals. The SEC’s deadline to respond or move forward is August 15, 2025.

Once that’s complete, the $125 million penalty, currently held in escrow, will be transferred to the US Treasury.

“They’re not going to be ‘cleared.’ That they illegally raised hundreds of millions through unregistered securities sales is settled law,” Fagel noted.

Still, this portion of the case ended in a clear defeat for Ripple. Fagel was adamant that the SEC would not let Ripple off the hook for former securities violations.

In legal terms, the court has already ruled that Ripple’s institutional sales violated securities laws, and those findings remain binding.