Ripple’s XRP token has seen its fair share of ups and downs. The SEC’s December 2020 lawsuit against the fintech company accused the company of selling unregistered securities. The legal clarity around the token was cloudy for nearly four years. With the lawsuit ended, let’s discuss what the court ruling says about XRP’s status. Is it a commodity? Or is it a security? Let’s find out.
Court Ruling Clarifies XRP’s Status
Before the SEC lawsuit came to an end, Judge Analisa Torres made it clear that XRP is a security when sold directly to institutional investors. However, Judge Torres’ ruling noted that XRP is not a security when traded on public exchanges and purchased by retail investors.
Fast forward to August 2025, and the SEC and Ripple have jointly laid the lawsuit to rest. While the court ruling made a clear distinction for which instances qualify XRP as a security, its commodity status is more obscure. In February of this year, Crypto.com successfully applied to the CFTC to certify XRP Event Contracts as short-duration derivatives. What this means is that XRP is a commodity in the narrow scope of these CFTC instruments. However, it is not a broad reclassification of XRP as a whole.
XRP can be classified as a security when sold to financial institutions, a non-security when sold via exchanges to retail investors, and a commodity for CFTC Event Contracts (Derivatives).
ETF Next?
There are several spot XRP ETF applications awaiting approval at the SEC. The SEC has taken a very pro-crypto stance after President Trump assumed office. The financial watchdog even has a pro-crypto candidate at its helm.
Also Read: Plan to Hit $1M With XRP: Here’s How You Do It Per A Seasoned Trader
Given the SEC’s new bullish outlook on cryptocurrencies, there is a high probability that the agency will approve at least one XRP ETF sometime this year. An ETF approval will likely lead to a surge in institutional inflows for XRP. Such a scenario may lead to XRP’s price hitting new all-time highs.
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