The U.S. SEC’s lawsuit against Ripple caused much greater damage to XRP than the initial price collapse in early 2021, according to a community pundit.
As the extensive lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) moves closer to a resolution, market commentators have taken to discussing the deep scars of the nearly five-year tussle.
Notably, one of these commentators is the analyst behind the community-driven X account “All Things XRP,” who recently argued that the lawsuit did not just hinder XRP’s progress but also robbed it of necessary growth and reputation.
XRP Price Suffers Setback
For context, the SEC filed its lawsuit against Ripple in December 2020. In its claim, it alleged that the company’s sales of XRP constituted unregistered securities offerings. Expectedly, the charges quickly impacted the XRP price amid the market reaction.
Within days, XRP plummeted over 70%, plunging from $0.65 to $0.17 as major U.S. exchanges such as Coinbase and Kraken delisted the token and liquidity dried up. But according to All Things XRP, the true damage was not just the immediate price crash, but the prolonged suppression that followed.
From 2021 through 2023, XRP stagnated in a tight range between $0.30 and $0.50. This period coincided with one of the most explosive bull markets in crypto history, where assets like Bitcoin, Ethereum, and Solana soared to new heights.
Years-Long Stagnation
On the other hand, XRP remained largely frozen. U.S. investors, wary of legal repercussions and limited by exchange restrictions, stayed away. As retail enthusiasm drove the broader market upward, XRP was on the sidelines, unable to benefit from the rally.
Importantly, there was a brief moment of optimism in July 2023 when Judge Analisa Torres ruled that XRP was not a security in and of itself. The market reacted swiftly, pushing the price from $0.42 to $0.9 overnight.
Yet the SEC’s decision to appeal the ruling reintroduced uncertainty. This halted any potential upward momentum. According to All Things XRP, this back-and-forth stifled growth, exhausted retail investors, and further dampened institutional interest.
3️⃣ A Glimmer of Hope.
July 2023: Judge rules XRP not a security (for retail sales).
Price doubles overnight from $0.42 → $0.84.
But the SEC appealed. Uncertainty returned. The climb was over before it began.
— All Things XRP (@XRP_investing) May 1, 2025
When the SEC finally dropped the case in March 2025, XRP’s price saw a modest 10% jump to $2.49. While that might seem significant, it failed to spark any major rally. For many, the market had already moved on. Other projects had captured investor attention, and XRP’s return felt more like a muted relief than a long-awaited victory.
Further Impact of the SEC Lawsuit
The analyst contends that the real loss is actually in opportunity cost. While XRP’s technology is still sound, regulatory pressure from the lawsuit capped its potential gains. Notably, analysts believe XRP might have reached substantially higher valuations without the lawsuit.
Furthermore, All Things XRP suggested that the case eroded trust. Essentially, financial institutions hesitated, partnerships stalled, and XRP’s brand took a reputational hit that may take years to repair.
Regarding innovation, Ripple’s ambitions in cross-border payments were put on pause. Further, the legal battle consumed time and resources that the firm could have used to scale its technology and market presence. Meanwhile, competitors surged ahead, claiming market share and spotlight.
Update on the Case
Notably, the case is now on the cusp of resolution amid the new SEC leadership. Ripple agreed to a $50 million fine, down from the original $125 million, for past institutional sales. The company could receive a refund of the remaining $75 million will be refunded, but this is pending final court and SEC approval.
Also, both Ripple and the SEC have paused their respective appeals, and in April, a federal appellate court agreed to hold the matter in abeyance. With Trump-era leadership bringing in a more crypto-friendly SEC under Chair Paul Atkins, enforcement actions have eased. This signals an imminent close to the case.
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