A recent application action suggests a new approach to regulate cryptocurrency.
The American presidential election of 2024 and recent judicial decisions caused a reassessment of the administrative authority within the federal agencies. Recent decisions of the United States Supreme Court have reported limits to regulatory surpassing, a theme included in the decision of the District Court in 2024 in Securities and Exchange Commission c. Ripple. These cases suggest a potential change in the regulatory landscape of cryptocurrencies, which face a complex network of obligations in American and federal courts. This complexity has fueled the criticism of the American Commission on Securities and Exchange (SEC) for what some describe as an inconsistent application rather than a clear regulation.
THE Ripple The case has become a flash point in this debate. Ripple Has started in December 2020, when the SEC allegedly alleged that Ripple Labs, and its leaders Bradley Garlinghouse and Christian Larsen, organized not recorded securities offers thanks to the sale of XRP, a cryptocurrency token, over a period of eight years. The SEC has classified XRP as a “safety of digital assets”, arguing that all XRP transactions – including secondary market sales by retail holders or non -professional investors – have required the recording of the SEC. This position was based on an expansive interpretation of 1946 Howey Test, which defines an “investment contract” – whose sale falls under the regulatory authority of the SEC. The criticisms argued that the dry approach did not have a statutory basis and equivalent to the development of the regulatory policy through an action in application rather than formal or public orientation regulations drawn up through a process of law on administrative procedure.
From 2021 to 2025, under President Gary Gensler, the SEC continued an approach focused on the application of the regulation of cryptocurrencies, depositing prosecution against several companies, including Ripple, Coinbase and Kraken. The mandate of Gensler has experienced more than 30 actions related to the crypto, the SEC often targeting companies for alleged violations in terms of explicit regulations. In RippleThe SEC argued that market players should have deduced XRP status as a guarantee despite the agency’s previous silence on its classification – a Ripple perspective challenged as vague and lacking in “fair notice”.
The cryptocurrency sector and voters who can invest in cryptocurrency have long been looking to clar. An investigation in 2024 revealed that a majority of registered voters believed that the United States had adopted the poor approach to cryptography regulations and that the SEC was heavy, two-thirds of the voters replied that the dry should wait for the Congress to provide clearer directives. THE Ripple The dispute underlined this tension: Garlinghouse would have argued that the refusal of the dry to define the status of XRP before 2020 illustrated the regulations by application, a criticism echoing the industry and in the academic circles. Other observers argue that if regulatory organizations enjoy a certain discretionary power with the application, there are institutional risks and limits to practice. The case also galvanized the public counterpoupoupoupou, with around 75,000 XRP holders depositing the Memoirs of Amicus to contest the complaints of the SEC. Their affidavits would have pointed out that many had bought XRP regardless of Ripple, undermining the assertion by the agency of a unified investment program.
In July 2023, judge Annala Torres of the United States, district court of the South New York district, ruled that XRP, as a digital token, did not satisfy Howey Definition of an investment contract. Programmatic sales to retail investors have been considered as non -security transactions, but institutional sales by RIPPLE were considered violations of registration requirements – a divided decision. This decision has reduced the wider framework for the “digital asset security” of the dry, influencing subsequent cases against other cryptographic entities. The 20024 cornerstone research data indicates a 30% drop in the application of the post-post-post-Ripplesuggesting a recalibration of the regulatory litigation strategy.
THE Ripple Decision Available inconsistencies in the previous directives of the SEC. A 2018 speech by the director of the Sec Division of Corporation Finance William Hinman declared an Ether Etherum cryptocurrency platform in Ethereum, a non-security because of its decentralized structure-a logical observer supported could also apply to XRP. Discovery in Ripple revealed an internal dissent from the dry in the face of Hinman’s remarks. Due to Hinman’s ties with a law firm linked to Ethereum, his speech raised questions about his impartiality. An investigation by the office of the Inspector General of the SEC in these claimed conflicts recently concluded that Hinman “followed the applicable ethics rules” in the pronunciation of the speech, but the episode still highlights potential vulnerabilities in the decision of the dry.
The 2024 amplified presidential election Ripple impact. The transition to a congress under republican control and to a pro -Crypto -money administration – triggered by political action committees supported by the industry (PACS) like Fairshake, which is partly funded by Ripple and Coinbase – aroused the aggressive position of the SEC. In January 2025, prosecution awaiting cryptocurrency were regulated or withdrawn, reflecting a policy of politics. The global market capitalization of cryptocurrency reached 3.41 billions of dollars by May 2025, reflecting significant growth of 2.738 dollars billions in mid-April 2025, with a longer trend with increasing value from a pre-electoral hollow in August 2024.
THE Ripple Box illustrates several broader challenges in the regulation of emerging technologies. First, it highlights the limits of the application of the XXth century securities frames to decentralized digital assets, as indicated by the participants during a recent dry round table. Second, it reveals the costs of regulatory uncertainty: the SEC trial in 2020 would have triggered a loss of market of $ 15 billion in the market value of XRP, affecting the retail holders not involved with Ripple. Finally, the case highlights the interaction between application and political economy, as mobilization of the cryptocurrency industry through a super CAP following Ripple probably influenced the electoral results.
For decision -makers, Ripple suggests a need for rather than administrative legislative solutions. A bill in 2025 was favorably reported by the Committee of Financial Services of the House of American Representatives aims to delimit cryptographic surveillance between the SEC and the Commodity Futures Trading Commission, which has potentially resolved jurisdictional overlap. Internationally, the contracting market framework in the crypto -wested European Union offers a contrast, providing a full regulatory structure since 2023 – although its effectiveness remains under control.
THE Ripple The dispute cannot dictate the ultimate trajectory of cryptocurrency, but it has reshaped the American regulatory conversation. Whether it will lead to a more competitive digital asset market or a simple break in the application depends on how decision -makers balanced innovation, consumer protection and administrative authority in the years to come.
Disclosure: The author has filed a request in acent of documents in dry c. Ripple but did not participate otherwise in the case and had no relationship with the parties or their affiliated companies. The author does not have to exchange cryptocurrencies.
