SEC Drops Landmark Case Against Ripple: Will SEC Abandon Biden-Era Crypto Asset Custody Proposal?

Ripple CEO Brad Garlinghouse took to X to announce that the US Securities and Exchange Commission (SEC) has dropped its nearly five year long case against the company.

“This is it. The moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it,” said Garlinghouse, on 19 March 2025.

This is it – the moment we’ve been waiting for. The SEC will drop its appeal – a resounding victory for Ripple, for crypto, every way you look at it.

The future is bright. Let’s build. pic.twitter.com/7WsD0C92Cm

— Brad Garlinghouse (@bgarlinghouse) March 19, 2025

A Ripple spokeswoman confirmed to the Wall Street Journal that the agency will drop its appeal against the company, subject to a commission vote and approval.

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“The SEC Was Dead Wrong,” Said Garlinghouse

The case started in 2020 under former SEC Chairman Jay Clayton. Garlinghouse said, “This case was doomed from the start.”

The SEC accused Ripple Labs of selling XRP as an unregistered security, alleging they raised $1.3 billion from institutional and retail investors. “It was the first major shot fired towards crypto,” according to him.

Post Donald Trump’s re-election, the SEC has dropped many such cases against crypto companies. On 27 February 2025, the agency dismissed its the case of civil enforcement action against Coinbase. SEC Acting Chair Mark Uyeda said, “It’s time for the commission to rectify its approach and develop crypto policy more transparently.”

Also, the SEC dismissed its case against Consensys’ MetaMask. The agency had earlier accused the company of securities violation related to its staking services and crypto swapping features. The lawsuit filed in 2023 against Justin Sun’s TRON has also been paused. The agency also closed its investigation into OpenSea last week.

Robinhood announced that the SEC had formally dropped its probe into the alleged violations of security laws following the May 2024 Wells Notice.

The case against Uniswap has also been dismissed. The company had received a Wells notification in April 2024 regarding their crypto trading and swapping services.

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Will Biden-Era Crypto Asset Custody Proposal Be Scrapped?

The SEC is considering abandoning a controversial proposal from the Biden administration that would have significantly impacted how financial firms safeguard crypto assets for their clients.

In February 2023, Gary Gensler proposed expanding the existing custody rules to explicitly include crypto assets. This proposal would have required qualified custodians—typically banks, broker-dealers, and certain trust companies—to maintain crypto assets on behalf of investment advisers.

Acting SEC Chair Uyeda, speaking at a securities conference in Orlando, Florida, indicated that the commission is now considering scrapping the proposal entirely.

According to a Reuters report dated 17 March 2025, Uyeda said the SEC “needs to prioritize effective and cost-efficient regulations that respect the limits of our statutory authority,”

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