Ripple Won, But Crypto Clarity Remains an Illusion -By Fransiscus Nanga Roka

The end of the legal war between the US Securities and Exchange Commission and Ripple Labs. This has not been the case with regulatory combat over digital assets. It is not a universal immunity certificate for crypto tokens, and treating the case as a pronouncement that “XRP is not security” transforms a fact-specific district court ruling into something it never was.

The SEC charged Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen in December 2020. What did it allege? That Ripple sold over $1.3 billion of unregistered XRP investment contracts in offers and sales. Ripple replied the XRP was not corporate stock, but rather a useful digital asset, and that SEC was improperly defining a new financial architecture through litigation instead of federal legislation.

Utilizing the 1946 Howey test set forth by the Supreme Court, Judge Analisa Torres found in July 2023 that Ripple’s direct institutional sales were classification of unregistered investment contracts. The sophisticated buyers plowed in money based on contractual arrangements and had a right to a return from Ripple’s work.

But Ripple so humdrum ole Howey with an “programmatic” sales on exchanges, because buyers usually unable to tell if they are buying (from) Ripple. The court further concluded that certain additional distributions and the executives’ sales were not investment contracts. Importantly, the ruling classified certain transactions and programs rather than XRP’s immutable legal identity. The question of whether another XRP sale is a securities transaction, however, will continue to turn on its economic reality, and promises surrounding it.

In August 2024, the court ordered a $125,035–150 civil penalty and issued a permanent injunction prohibiting Ripple from committing future violations of Section 5. That was way under the remedies the SEC, in its request of nearly $2 billion, said should be imposed but it also was not complete exoneration: the court found 1,278 unlawful institutional sales contracts.

Both sides appealed. They later tried to cut Ripple’s fine to $50 million and throw out the injunction, but the district court wouldn’t rewrite its ruling. The parties agreed to withdraw their appeals on August 7, 2025. So the $125 million penalty and injunction stayed in place.

Directly, only in the context of this federal lawsuit. And because the Second Circuit never reached the merits, Judge Torres’s analysis did not establish binding appellate precedent nationwide—much less in a global context. Additionally, other district judges might find it persuasive enough to reject his reasoning or to differentiate between various token-distribution structures from the one at bar.

It annihilated SECs overly simplistic notion that a token is basically always securities in transaction.push to even the ones you have distributed by an investment contract. However, it also revealed the constitutional frailty of “regulation by enforcement”: entrepreneurs discovered their legal obligations in hindsight (after years spent in court), while the extent to which retail investors were protected depended on where they lived and who was occupying a legislative seat.

Insert every example of this institutional failure and the name of congress’s CLARITY act here as evidence. In July 2025, the House passed it by a vote of 294–134 with the Senate Banking Committee approving revised legislation in May 2026. But as of September 2026, it had only advanced through part of the legislative process.

Congress should pass simple, technology-neutral legislation; disaggregating digital commodities from securities; subdividing transactions by capitalization intent, decentralization, sophist expectations and management follow-up obligation; tightly boundary-creating SEC and CFTC authority; require reserve/custody/disclosure/conflict-of-interest obligations; and a registration-safe-harbored bills due after a sunset period without putting fraud-free.

Not regulation but regulatory absolutism, which Ripple beat. If the Washington establishment believes one company being able to survive court isn’t thoroughly deciding the law, “clarity” will still be just another speculative crypto asset.

Fransiscus Nanga Roka

Faculty of Law University 17 August 1945 Surabaya and Managing Partner Law Firm Victorious Indonesia