Crypto Lawyers Sound Alarm Over Misunderstood XRP Settlement

While much of the XRP community has been celebrating what they believed to be the end of the long-running legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), some legal experts are urging caution. According to former SEC lawyer Marc Fagel, the lawsuit is not officially over—at least not yet. As highlighted in recent reports by Coingape, reflecting ongoing uncertainty about the case’s final resolution.

Why the XRP Case Still Lingers

The confusion stems from Ripple recently dropping its cross-appeal in the case. This led to widespread belief that the legal saga had finally come to a close. However, in a recent post on X, Fagel clarified that the case will not be fully resolved until the SEC formally votes to drop its own appeal.

“The SEC still needs to vote to drop the appeal,” said Fagel, who once served as a regional director at the SEC. His comment suggests that until that vote occurs, the case remains technically active, even if major decisions have already been made.

Did the SEC Already Vote to End It? Maybe Not

A key point of confusion lies in whether the SEC’s previous vote to approve a settlement with Ripple also included authorization to abandon the appeal. XRP lawyer Bill Morgan questioned this, asking whether a new vote is now required since the original settlement agreement was conditional and those conditions were never fulfilled.

Fagel responded by noting that authorizing a settlement is not the same as voting to withdraw an appeal. “They voted to authorize a settlement agreement; simply dropping the case is a different action,” he explained. He also pointed out that this situation is somewhat unusual, even for a regulatory agency like the SEC.

His remarks have cast doubt on earlier confident claims that the Ripple lawsuit was completely over. In fact, Morgan himself, who previously tweeted that the case was “finally, finally, OVER”, has now slightly walked back that assertion.

Is the Settlement a Sign of Weakness or Strategy?

The partial resolution between Ripple and the SEC has been polarizing. Some critics argue that Ripple’s agreement to settle reflects an admission of wrongdoing. But Morgan disagrees, saying, “Settlement is not an admission of fault.” He added that most legal settlements happen without the admitting party accepting liability.

Morgan also emphasized that Ripple has never admitted that its institutional sales of XRP were securities. Instead, the real legal win for Ripple, according to him, came from Judge Analisa Torres’ earlier ruling that XRP itself is not a security, regardless of how it’s sold. This is a significant distinction, as it suggests that XRP should be viewed more like a commodity than a security, least under current legal interpretation.

Why This Matters for XRP and the Crypto Market

This legal uncertainty matters because it affects how cryptocurrencies like XRP are treated in the U.S. financial system. If XRP is not a security, then its sale on exchanges and use by everyday consumers would not fall under SEC regulation, which could open the door for broader adoption and less legal risk.Still, until the SEC officially votes to drop the case, Ripple and XRP remain in legal limbo. As Fagel put it, “Nothing about this is normal.” For now, the crypto community will have to wait a little longer for true finality.