Ripple’s SEC Settlement: Could XRP Be Classified as a Commodity?

At press time, it looks like the Ripple-SEC showdown might finally be winding down. According to Coinfomania, including FOX Business’ Eleanor Terrett, the settlement talks are in their final stages. The delay? Well, Ripple is reportedly working hard to negotiate better terms after a 2023 court ruling that hit them with a hefty $125 million fine for unregistered sales to institutional investors. But the good news for XRP holders? The court did clarify that XRP isn’t a security when sold to retail investors on exchanges.

🚨SCOOP: Two well-placed sources tell me that the @SECGov vs. @Ripple case is in the process of wrapping up and could be over soon.

My understanding is that the delay in reaching an agreement is due to Ripple's legal team negotiating more favorable terms regarding the August…

— Eleanor Terrett (@EleanorTerrett) March 12, 2025

There’s also a bit of buzz suggesting the SEC might label XRP a commodity, taking a page from Ethereum’s playbook. If that happens, it could send a strong, positive signal to the market.

A pivotal moment for XRP

If Ripple and the SEC finally strike a deal, it could be a huge turning point for XRP. The regulatory clarity would be a breath-down for the asset, potentially paving the way for broader adoption and some much-needed stability. But, here’s the thing: The U.S. government’s recent push for a Strategic Bitcoin Reserve (announced in March 2025) might complicate things a bit. 

Bitcoin’s dominance in the market might put altcoins like XRP on the back burner for some investors. But, on the flip side, if XRP gets reclassified as a commodity, that could be a big win, boosting its reputation in the eyes of investors and regulators alike.

The unending Ripple-SEC drama

In December 2020, the SEC sued Ripple, claiming the company had raised over $1.3 billion through unregistered XRP sales. By 2023, Ripple scored a partial victory when Judge Analisa Torres ruled that XRP isn’t a security when sold to retail investors. Ripple still got slapped with a $125 million fine for institutional sales. 

As of March 2025, we’re getting closer to the endgame, with settlement talks moving ahead—though Ripple’s legal team seems to be pushing for better terms in light of that 2023 ruling.

Ripple’s Chief Legal Officer, Stuart Alderoty, is sounding confident about a resolution, saying the SEC appeal brief is a repetition of “failed arguments.” We’ll see how it plays out.

As expected, the SEC’s appeal brief is a rehash of already failed arguments –and likely to be abandoned by the next administration. We’ll respond formally in due time. For now, know this: the SEC’s lawsuit is just noise. A new era of pro-innovation regulation is coming, and… https://t.co/3ZxO64Fs8C

— Stuart Alderoty (@s_alderoty) January 16, 2025

The big question: is XRP a commodity?

One of the most important sticking points in these settlement talks is how XRP will ultimately be classified. Could the SEC treat it like a commodity, similar to how it handles Ethereum? As it stands, expert Edoardo Farina believes it is a very big mistake to sell your XRP at $3+, suggesting bigger price updives might be in view. 

If this happens, XRP could join the ranks of other digital assets that aren’t burdened by securities laws, which could be a huge win for its market position. Let’s just hope the outcome isn’t as unpredictable as the market itself.