SEC removes Ripple's bad actor designation, XRP issuer free to raise money from private markets
The US Securities and Exchange Commission (SEC) has waived the “bad actor” designation for Ripple to allow the firm to raise private capital. The move comes a day after the SEC and Ripple finally settled their 5-year lawsuit.
According to a release from the regulator on August 8, it decided in light of recent facts and circumstances. These include the fact that the SEC wanted the lawsuit resolved so that the final judgment injunction against Ripple would have been dissolved, automatically removing the disqualification.
It said:
“The Commission has determined pursuant to Rule 506(d)(2)(ii) of the Securities Act that good cause exists for not denying the exemption contained therein.”
The disqualification had originally kicked in when the SEC sued Ripple in 2020 for violating Section 5 of the Securities Act. Judge Analisa Torres of the District Court ruled in her judgment that Ripple selling XRP to private investors constituted unregistered securities and issued an injunction preventing the company from continuing with such acts.
However, the parties decided to settle in May 2025 and asked the district court judge to issue a ruling to dissolve the injunction. Given that Judge Torres refused to issue this ruling, the final injunction remains effective despite the settlement and withdrawal of appeals. Hence, the SEC needed to issue a waiver.
Order returns Ripple to pre-lawsuit position
Speaking on the decision, pro-XRP attorney and former US Senate candidate John Deaton stated that it now means Ripple can proceed with its business as if the 5-year lawsuit never happened. It is the final diamond in the crown of the Ripple and SEC settlement.
He said:
“@Ripple can continue to raise money in the private markets. One might even argue, it’s business as usual – as if the lawsuit against Ripple and the $125M fine never happened.”
Unsurprisingly, many in the XRP community have welcomed the decision, which they consider a massive victory for Ripple and a major boost for the token. However, some users were still critical of the SEC, noting that the years of uncertainty have left XRP trailing and with losses for investors who held through the long winter for the token.
If it is any consolation, the complete legal victory for Ripple has led to massive gains for XRP, with the token gaining more than 12% over the past seven days. It is now trading at $3.338.
The token has also risen 36.76% in value over the last 30 days and gained 43.86% year to date to be one of the best performers, even better than ETH, which is on a resurgence trend, or Bitcoin, with its multiple all-time highs in 2025.
XRP set for further gains
Meanwhile, analysts believe XRP is primed for further gains and justify the potential performance based on current market trends. For instance, Santiment data notes that utility spikes on the XRP Ledger network suggest the token could see more rally because previous on-chain surges have increased prices.
Glassnode data also shows that XRP’s future activity has increased, with 24-hour volume up by 208%, reaching $12.4 billion. This is far above that of Solana with $9.6 billion and shows that more people are piling on XRP perps.
Open interest has also risen by 15% to $5.9 billion, with a positive funding rate that suggests that most traders are long on the asset. While this reflects the overwhelming bullish sentiment, analysts warn that the liquidation risks are also high if the price should fall.
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