XRP holders helped Ripple resist SEC pressure, Deaton says

John Deaton said 75,000 XRP holders provided the support that helped Ripple resist SEC pressure during the agency's four-year enforcement action, as the closed case returns to focus after executive accounts surfaced.

"The 75,000 XRP holders who filed amicus briefs and stood with Ripple gave the company the strength to fight rather than fold," John Deaton, the attorney who represented the XRP holder group, said.

Ripple spent about $150 million defending against SEC allegations that XRP was an unregistered security. The company considered dissolving and distributing its XRP holdings to shareholders in 2020, CEO Brad Garlinghouse revealed this week at the University of Kansas School of Business. The SEC had sought $2 billion in penalties before the court ordered a $125 million civil penalty, later reduced to about $50 million after both sides withdrew their appeals in 2025.

The renewed focus on the case comes as Ripple pursues a Federal Reserve master account and a national trust bank charter, seeking direct access to the US payment system. The Fed has paused new crypto account decisions until late 2026, and Senator Elizabeth Warren has challenged the legality of Ripple's bank charter approval.

Garlinghouse said he met SEC officials four times between 2017 and 2019 without a lawyer present, and officials never informed him that XRP could later be considered a security. That experience shaped Ripple's decision to challenge the lawsuit rather than settle. David Schwartz, Ripple's chief technology officer at the time, said the company's lawyers told leadership Ripple was "done and unsavable" and that they should cut a deal.

In July 2023, Judge Analisa Torres ruled that XRP itself is not a security and that Ripple's programmatic sales on public exchanges did not qualify as securities transactions. The court found that certain direct sales to institutional buyers violated securities laws and ordered Ripple to pay a $125 million penalty while restricting future institutional XRP sales.

Ripple and the SEC attempted to resolve remaining issues in 2025, but the court rejected their settlement proposal. Both sides eventually withdrew their appeals, leaving the original judgment and restrictions unchanged.

Ripple's Post-Lawsuit Expansion

Despite the legal outcome, Ripple continued expanding beyond the United States. The company secured a full Markets in Crypto-Assets license in Luxembourg, allowing it to provide regulated crypto services across the European Economic Area. This week, XRP became the first cryptocurrency to appear on the jersey of a major US college team under a five-year deal with the Kansas Jayhawks.

The company that once weighed making XRP disappear to escape the government now wants to become a permanent part of the US financial system. Ripple's RLUSD stablecoin has passed $1.6 billion in supply, and the company has spent heavily acquiring firms that handle settlement and treasury work.

Deaton's comments reinforce the narrative that community support was critical to Ripple's survival. The 75,000 XRP holders who participated in the case as amici curiae provided a counterweight to the SEC's enforcement power, he said.

This article is for informational purposes only and does not constitute investment advice.