Ripple-SEC Lawsuit Nears End: Will XRP Be Classified As Commodity Like Ethereum?

The prolonged legal battle between the SEC and Ripple Labs, initiated in December 2020 over the alleged $1.3 billion unregistered XRP XRP/USD sale, may soon conclude, according to a Fox Business report.

A key point of contention in the negotiations is whether's XRP’s utility and trading status align more closely with a commodity, similar to Ethereum ETH/USD, rather than a security.

This comparison has emerged as a critical factor in determining the case's outcome, as the SEC reevaluates its stance under new leadership.

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Fox Business senior correspondent Charles Gasparino noted on X that Ethereum's treatment as a commodity is central to the discussions. "I am told the @ethereum example is key," Gasparino wrote, explaining that both XRP and ETH were issued via ICOs to fund platform development, yet only Ripple faced legal action while Ethereum evolved into a commodity.

The SEC is now assessing whether XRP can be classified similarly, given its ongoing trading and utility.

Fox Business reporter Eleanor Terrett added that the delay in finalizing the case stems from Ripple's legal team seeking better terms following a $125 million fine and an injunction from an August 2023 district court ruling, which barred institutional XRP sales.

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"The argument, I'm told, is that if the new SEC leadership is wiping the enforcement slate clean for all previously-targeted crypto firms, why should Ripple still be penalized?" Terrett posted on X.

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The lawsuit's trajectory shifted after Judge Analisa Torres ruled in July 2023 that Ripple's programmatic XRP sales did not breach securities laws due to their blind bid process, though institutional sales were deemed securities.

The SEC's approach has softened under President Trump's administration, with the December 2024 appointment of crypto advocate Paul Atkins as the incoming SEC chair, pending confirmation.

The agency has since withdrawn cases against Coinbase COIN, OpenSea, Robinhood HOOD, and UniSwap UNI/USD, and a task force led by Commissioner Hester Peirce is working to clarify which crypto assets qualify as securities.

Meanwhile, Franklin Templeton's recent filing for a spot XRP ETF—the largest asset manager to do so—reflects growing industry optimism fueled by Trump's crypto-friendly policies.

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