SEC may drop XRP lawsuit as pressure mounts

The SEC delays key crypto lawsuits, possibly stalling before dropping them, as leadership changes and Trump’s executive order reshape regulatory power.

The SEC is delaying major crypto lawsuits, possibly to buy time before dismissing them. This strategy was seen in the Coinbase case, where the Commission requested a deadline extension. However, it has yet to formally drop its most high-profile cases.

Under Gary Gensler, the SEC pursued legal action against Ripple, Kraken, and other crypto firms. Now, as leadership changes, the agency appears less aggressive. The Ripple lawsuit, filed in December 2020, remains one of the most significant legal battles in the crypto sector. With an important April 16 court deadline, many speculate that the SEC might be reconsidering its stance.

According to reports from Capitol Hill, the Commission is prioritizing cases with imminent deadlines. “I’m told by multiple legal sources that the SEC has been focusing on cases with closer court deadlines, which might explain why we haven’t seen delay requests for the Ripple and Kraken lawsuits,” said journalist Eleanor Terrett.

While the SEC requested a 30-day extension in its battle with Coinbase, no such move has been made in the Ripple case. The Commission has shown a willingness to drop smaller legal battles, but the XRP case has broader implications for U.S. crypto regulation. This means the agency might be hesitant to withdraw from it completely.

However, by April, several changes at the SEC could allow more flexibility in handling the Ripple lawsuit. The current Acting Chair, Mark Uyeda, is temporarily leading the Commission, and Paul Atkins is still awaiting Senate confirmation. If Atkins is formally approved, he could have the authority to make major decisions, including dropping the case.

Additionally, Congress recently formed its first Crypto Subcommittee, which is investigating regulatory overreach. If the findings support the idea that the SEC overstepped its jurisdiction in the Ripple case, it could pressure the agency to reconsider.

More significantly, President Trump may intervene. The Department of Government Oversight (D.O.G.E.) is already planning an investigation into SEC enforcement, and it operates under executive branch authority.

Last night, Trump escalated his policies, signing an executive order to establish direct federal oversight over regulatory agencies like the SEC and FTC. If implemented by April, this order could give the White House the power to compel the SEC to drop the Ripple lawsuit entirely.

“So-called independent agencies like the FTC and SEC have exercised enormous power over the American people without Presidential oversight. These agencies issue rules that cost billions of dollars and impact major policy issues. Now, they will no longer be able to impose rules without accountability,” Trump’s statement read.

This executive order has sparked intense debate. It centralizes federal power, and legal experts believe the Supreme Court may strike it down. However, it highlights how many different ways Trump could reshape U.S. crypto regulation.

The SEC that first sued Ripple is no longer the same agency. While it hasn’t yet dropped the case, the shifting political and legal landscape may soon force a different outcome.