US SEC To Pause Ripple Lawsuit After Coinbase, Ex-SEC John Reed Stark

The U.S. Securities and Exchange Commission (SEC) is expected to pause its Ripple lawsuit following similar actions in its cases against Coinbase and Binance. The regulatory agency has recently requested delays in both cases, signaling a shift in its crypto enforcement approach.

Will The US SEC Pause Ripple Lawsuit Next?

According to an X post by former SEC official John Reed Stark, the agency may soon put its Ripple lawsuit on hold. Stark highlighted the SEC’s recent decisions to delay legal proceedings against Coinbase and Binance, suggesting that these moves indicate a broader change in enforcement strategy.

On Friday, the SEC informed the Second Circuit Court that its new Crypto Task Force could lead to a resolution in its case against Coinbase. This prompted a request for a delay in responding to Coinbase’s appeal regarding whether securities laws apply to transactions on its platform. A similar joint motion was filed in the Binance case last week, requesting a two-month pause in proceedings.

Stark emphasized that the SEC’s approach to crypto enforcement is changing, stating that the agency’s crypto-related unit has been rebranded from the “Crypto Assets and Cyber Unit” to the “Cyber and Emerging Technologies Unit.” This restructuring suggests a potential slowdown or even a halt in SEC-led crypto investigations and litigation.

SEC Crypto Cases Facing Pauses and Settlements

The SEC has faced multiple lawsuits in its enforcement actions against major crypto firms, including Ripple, Coinbase, and Binance. However, recent developments indicate that the agency may be shifting away from aggressive litigation ahead of Paul Atkins taking charge of the agency.

In the Coinbase case, the SEC and Coinbase jointly requested a delay in court proceedings, citing ongoing regulatory discussions. A similar request was made in the Binance case, where both parties agreed that a temporary pause was necessary while the SEC reevaluated its stance on digital assets.

Stark suggested that these delays could lead to broader settlements or dismissals of crypto-related cases. He noted that the SEC’s approach under previous leadership focused on strict enforcement, but the recent changes signal a different direction. He also pointed out that key SEC trial lawyers previously leading these cases have been reassigned, further supporting the idea that the agency is stepping back from its earlier stance.

Ripple Lawsuit Likely to Follow the Same Pattern

With the SEC pausing its cases against Coinbase and Binance, legal experts believe that the Ripple lawsuit could face a similar fate. Attorney Jeremy Hogan has recently commented on the matter, stating that the SEC may settle its case against Ripple before approving an XRP exchange-traded fund (ETF).

He suggested that a settlement was likely before any ETF approval, reinforcing speculation that the SEC is reconsidering its legal battles with crypto firms. Moreover, with the chances of an XRP ETF approval rising to 80% on polymarket and the US SEC acknowledging three ETF applications so far, the XRP lawsuit end may be looming.

The clash between the SEC and Ripple has been a long-running legal dispute over whether XRP should be classified as a security. A partial court ruling in 2023 determined that XRP was not a security in certain transactions, but the SEC has continued to challenge this decision. If the SEC follows the same pattern as in the Coinbase and Binance cases, and the Elon Musk DOGE investigation on the agency continues, a pause or settlement in the XRP lawsuit may soon follow.

On the other hand, it’s also worth noting that Ripple’s XRP price traded at $2.52, down 2% intraday in line with broader market trends. The coin hit a bottom and peak of $2.47 and $2.62 in the past 24 hours, respectively.