Big news from Ripple Labs: CEO Brad Garlinghouse announced in a video shared on X, formerly Twitter, this Wednesday that the SEC is expected to drop its appeal in their long-running lawsuit. This legal battle has been ongoing for four years.

“I can finally say it – this case is over,” Garlinghouse declared on X. He didn’t hold back, calling it “a victory and [a] long overdue surrender from the SEC.”

To recap, Ripple, the company behind XRP Ledger and the XRP cryptocurrency, had secured a partial win in court back in 2023. However, the SEC wasn’t ready to concede, filing an appeal to challenge that favorable ruling.

The judge in a New York federal court had previously ruled that Ripple’s “programmatic sales” of XRP on the open market were not considered securities transactions. However, sales to institutional investors were deemed to be securities.

It’s worth noting that, as of now, the SEC hasn’t officially confirmed they’re dropping the appeal. Despite this, the news sent XRP’s price soaring, climbing as much as 14% to $2.55, according to CoinGecko data at the time of writing.

A Ripple spokesperson clarified to Decrypt that while the SEC is expected to withdraw the appeal, the decision still needs to go through a Commission vote and approval process. They indicated it could take “several weeks” for the official withdrawal, emphasizing that the timeline is “completely in the SEC’s control.”

When contacted by Decrypt for comment, the SEC declined to provide any details regarding the Ripple lawsuit.

Back in August, a New York federal court had already ordered Ripple to pay a $125 million penalty for XRP sales to institutional clients. This fine was significantly less than the SEC’s initial demand of $2 billion. It remains to be seen how the SEC dropping its appeal will affect this existing ruling in the Southern District of New York.

Many in the legal and crypto spheres had anticipated this apparent change of heart from the SEC.

Since Mark Uyeda stepped in as SEC Acting Chair, the agency has appeared to be pulling back from several enforcement actions, notably including cases against major crypto exchanges like Coinbase and Kraken.

The outcome of the SEC’s lawsuit against Ripple was always seen as potentially precedent-setting. Had the SEC won, it could have dramatically shaped how cryptocurrencies are classified – as securities or commodities – across the board.

Stuart Alderoty, Ripple Labs Chief Legal Officer, had told Decrypt in October that he expected the SEC’s appeal to “backfire.” This was before the recent change in SEC approach became so apparent.

While Alderoty expressed confidence that the Second Circuit Court of Appeals would rule in Ripple’s favor, he also pointed out the SEC’s prerogative: they could “withdraw their appeal anytime they want.” As it appears, that time may be now.

Editor’s note: This story was updated to include a comment from a Ripple Labs spokesperson.

Edited by Stacy Elliott.