SEC Lawsuit Against Ripple Might Be a Diversion, Argues Commentator, Suggesting U.S. Government Secretly Controls XRPL
Ripple's legal battle with the Securities and Exchange Commission (SEC) was a significant regulatory conflict that lasted nearly five years, culminating in a $125 million settlement in August 2025. The dispute, which involved multiple court rulings and appeals, was primarily about whether Ripple's XRP token constituted an unregistered security.
Contrary to some speculations, there is no credible evidence or indication that Ripple's legal battle was a strategic distraction to facilitate government-backed global expansion. The case's resolution came after a change in the U.S. regulatory climate with a more "pro-crypto" administration starting in January 2025, leading to a joint withdrawal of appeals by both parties rather than continued litigation.
The legal dispute and settlement clarified XRP's classification and compliance requirements rather than serving as a deliberate distraction, laying groundwork for regulated institutional sales. Ripple's XRP, if successful, could potentially replace SWIFT, the global payments messaging system, offering near-zero fees, instant settlement, and compliance with the ISO 20022 messaging standard, features suited for large-scale financial infrastructure.
Meanwhile, Ripple's expansion was considered by analysts like Pumpius to be the company's mission, not the lawsuit. Pumpius suggests that Ripple's expansion can be seen as a footprint of sanctioned expansion, not rogue innovation. Ripple's partner list includes Federal Reserve pilot projects, central banks in Bhutan, Palau, and Montenegro, payment corridors in the Middle East and Asia, and relationships with U.S. defense-linked banks such as BNY Mellon.
Pumpius argues that Ripple's strategy was to open payment corridors abroad first, then bring the infrastructure back to the U.S. once it was ready. The XRPL, if successful, could potentially move not just money but also sensitive identity information like DNA, raising concerns about privacy and control of personal identity. Tokenizing bio-data on the XRPL could give whoever controls the ledger influence over personal identity.
In other news, Grayscale is moving forward with an ETF application for Cardano, a significant milestone for the cryptocurrency.
References:
- Ripple vs. SEC: A Timeline of the Legal Battle
- Ripple Settles SEC Lawsuit, XRP Is Not a Security for Retail Investors
- Ripple and SEC Settle XRP Lawsuit for $1.3 Billion
- SEC Settles with Ripple, Signaling a Shift in Crypto Regulation
- Ripple's XRP Settlement: What It Means for the Crypto Market
Business analyst Pumpius argued that Ripple's expansion is the company's mission and not the legal dispute, suggesting that Ripple's strategy was to establish payment corridors abroad first, then bring the infrastructure back to the U.S. Meanwhile, the advancement of technology like blockchain in finance continues to reshape industries, as Ripple's XRP, if successful, could potentially replace traditional payment systems such as SWIFT and manage sensitive data like DNA, raising concerns for privacy and control of personal identity.
