Pundit Reveals New Theory on the SEC’s Ongoing Ripple Lawsuit Delay

A market analyst has presented a new theory on why the U.S. Securities and Exchange Commission (SEC) has not yet dismissed its long-standing lawsuit against Ripple, despite recent dismissals of cases against other crypto firms.

The Ripple Lawsuit’s Unusual Longevity

The SEC’s ongoing legal battle against Ripple has left many in the crypto space puzzled. Under new pro-crypto leadership, the commission has swiftly ended lawsuits against major firms like Coinbase and Kraken. Yet, the Ripple case remains active, prompting speculation about its unique circumstances.

Market commentator Vincent Van Code recently shared a theory that the delay could stem from Ripple’s attempts to lift a crucial court injunction restricting certain XRP sales.

Ripple’s Alleged Moves to Lift Injunction

Van Code suggests that Ripple may be negotiating with the Second Circuit Court of Appeals to overturn a key decision from July 13, 2023. That ruling, by U.S. District Judge Analisa Torres, classified Ripple’s direct XRP sales to institutional investors as securities transactions. If Ripple can successfully challenge this finding, it could sell XRP to financial institutions without regulatory barriers.

Beyond that, Van Code speculates that Ripple could be positioning its escrow holdings—amounting to 37.1 billion XRP—as a strategic asset for the U.S. government. This would align with President Donald Trump’s recent confirmation that XRP would be part of the U.S. crypto reserve. A potential outcome of such negotiations could involve Ripple settling its $125 million SEC-imposed fine by transferring XRP to the government.

For Ripple to proceed with such an arrangement, it would need to lift the court-imposed injunction on institutional sales. However, while Van Code’s argument presents a compelling angle, it remains speculative due to the lack of concrete evidence.

SEC’s Recent Dismissals of Other Crypto Cases

Ripple’s situation stands in contrast to other cases that have seen quick resolutions. The SEC recently dropped its lawsuit against Coinbase, which had accused the exchange of offering unregistered securities. Similarly, it dismissed its case against Consensys regarding MetaMask staking services and abandoned its action against Kraken in February.

These cases, filed more recently than the Ripple lawsuit, were settled within months. Meanwhile, the Ripple lawsuit—initiated on December 22, 2020—remains active, now under review by the Second Circuit Court of Appeals.

Ongoing Legal Proceedings

On January 15, 2025, the SEC submitted its opening brief to the appellate court, while Ripple has until April 16 to respond. Some legal experts, including attorney Jeremy Hogan, have pointed to the injunction on XRP sales as a major factor in the lawsuit’s persistence. Hogan’s insights align partially with Van Code’s theory, suggesting Ripple may be working to lift regulatory restrictions before a settlement can be reached.

Conclusion

While the exact reason behind the SEC’s continued pursuit of Ripple remains unclear, multiple theories suggest that the case is more complex than others the SEC has recently dismissed. Whether Ripple succeeds in lifting the injunction or negotiating a favorable outcome with regulators remains to be seen.