An initial ruling in July 2023 had partially favored Ripple by determining that certain XRP transactions did not constitute securities offerings. The SEC appealed that decision, while Ripple cross-appealed portions that were unfavorable. In early 2025, both parties sought to pause the appellate process to negotiate a settlement requiring Commission approval. Commissioner Caroline Crenshaw publicly criticized the proposed deal, and a district judge rejected it, citing unresolved questions about investor protection. A second settlement attempt met the same fate.
Ripple ultimately withdrew its cross-appeal in June. Two months later, the SEC followed suit, permanently ending the dispute without additional penalties beyond those already addressed in court. XRP’s market price rose sharply in the hours after the announcement, underscoring investor relief at the lawsuit’s conclusion.
Binance Case Dismissed Following Joint Request
The regulator has taken similar steps in its action against Binance Holdings Ltd., its founder Changpeng “CZ” Zhao, and the exchange’s U.S. affiliate. On 29 May 2025, the SEC petitioned a federal court to dismiss allegations that Binance offered unregistered securities, failed to restrict U.S. customers from its global platform, and violated anti-fraud provisions.
Those claims, filed in June 2023, had overlapped with separate investigations into money laundering and sanctions compliance conducted by other federal agencies. Binance settled those matters for fines of $4.3 billion and $2.7 billion, respectively. Following those penalties, Zhao pleaded guilty to related criminal charges but received a presidential pardon from Donald Trump in October 2025, eliminating further legal exposure in the United States.
The SEC and Binance previously asked the court for a 60-day stay in February 2025 to explore a settlement shaped by the agency’s new crypto task force. The May filing formally ends the civil case, leaving the exchange to operate under compliance commitments it made during earlier negotiations with the Treasury Department and the Justice Department.
Project Crypto Signals Broader Policy Shift
Chair Atkins has launched “Project Crypto,” an internal review intended to develop rules for token generation events, airdrops and other distribution methods. While details remain scarce, Atkins has indicated that the project aims to clarify when a digital asset transitions from a security to a non-security, addressing a long-standing industry concern. A public consultation period is expected to open later this year.
Commissioner Peirce echoed that objective during testimony before the Senate Banking Committee, stating that the SEC will “replace regulation by enforcement with regulation by rulemaking.” Her comments align with bipartisan calls in Congress for a comprehensive statutory framework. Background on the agency’s evolving stance can be found on the SEC’s official website, which includes a timeline of crypto-related actions (sec.gov).
Analysts say the rapid dismissals mark the most consequential shift in federal crypto oversight since the SEC began targeting token issuers in 2017. Although some commissioners have voiced concern that abandoning litigation could weaken investor safeguards, the Atkins-Peirce team maintains that clear, upfront rules will reduce uncertainty and allow legitimate projects to flourish without fear of retroactive enforcement.
For the companies involved, the immediate benefit is freedom from protracted and costly legal battles. Ripple executives have indicated they will accelerate international expansion plans now that the case is closed. Binance, meanwhile, remains the world’s largest crypto exchange by volume, and the removal of civil charges in the United States may ease its efforts to regain banking partners and institutional clients.
The SEC has not announced decisions regarding other open cases, but recent actions suggest the agency may continue to reevaluate ongoing litigation. Market participants are watching closely to see whether forthcoming rule proposals under Project Crypto will provide the clarity the industry has long requested.
Crédito da imagem: Logan Hitchcock
