The crypto industry received a significant legal victory as Ripple CEO Brad Garlinghouse announced on March 19 that the U.S. Securities and Exchange Commission (SEC) had officially dropped its appeal against the company. The announcement came in a video posted on social media platform X, where Garlinghouse noted the regulatory agency’s decision to end its pursuit of further litigation.

Besides this interesting development, another major financial development has taken center stage in the crypto market in the past 24 hours; the outcome of the Federal Reserve’s latest meeting. 

Fed Keeps Interest Rates Steady Amid Uncertainty

The outcome of the latest Fed meeting can be divided into six key decisions. First, the Federal Reserve opted to maintain interest rates at their current level, keeping the borrowing rate in a range between 4.25% and 4.5% for the second consecutive meeting. This decision is part of a continued pause in the Fed’s tightening cycle. 

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Secondly, the Fed noted that uncertainty surrounding the economy has increased, and third, the Fed’s updated projections were the shift in expectations for rate cuts in 2025. The median forecast suggests 50 basis points of cuts for the year, but a growing number of Fed officials are less convinced that rate reductions will be necessary. In December, only one official anticipated no rate cuts in 2025. However, there’s now a more divided outlook, and that number has now risen to four, as noted in a post on social media platform X by analysts at The Kobeissi Letter.

Beyond interest rates, the Fed revised its economic growth projections downward for 2025, suggesting that policymakers see slower expansion ahead. This adjustment comes alongside an increase in the Fed’s inflation forecast for the same period, reflecting concerns about price pressures persisting longer than previously anticipated. With inflation remaining a key focus, the central bank is treading carefully as it evaluates the right time to pivot toward a looser monetary stance.

Fourthly, the Fed announced that it would slow the pace of its balance sheet runoff beginning in April. This is alongside a sharp reduction in the Fed’s 2025 growth projections and a markup in their 2025 inflation forecast.

Implications For Crypto Markets And Digital Assets

For the crypto industry, the Fed’s decision to hold rates steady and its mixed messaging on future cuts introduce a dynamic situation to Bitcoin and others. The fact that the Fed is still concerned about inflation and economic uncertainty shows that the path to more accommodative policies regarding the crypto industry may not be as smooth. 

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However, if the Fed stays hesitant to cut rates and economic growth slows as projected, digital assets may face headwinds later in the year, which may slow down the predicted growth by crypto analysts.

Featured image from Unsplash, chart from Tradingview.com

Ripple Labs CEO Brad Garlinghouse said in a video shared to his X account Wednesday that the SEC will drop its appeal in the lawsuit it’s been pursuing against the firm for the past four years.

“I’m finally able to announce that this case has ended. It’s over,” Garlinghouse said on X, formerly known as Twitter. “Today is a victory and [a] long overdue surrender from the SEC.”

Ripple, which uses XRP Ledger and the XRP cryptocurrency, got a partial ruling in its favor in 2023, but the SEC filed an appeal seeking to have that decision overturned.

A federal New York judge found that Ripple’s “programmatic sales” of XRP on a secondary market did not constitute securities transactions, while those made to institutional investors did.

To be clear, the SEC has not yet made an announcement that it will drop its appeal. At the time of writing, the XRP price has climbed as high as 14% to $2.55, according to CoinGecko data.

A Ripple spokesperson confirmed to Decrypt that the SEC’s decision is “subject to Commission vote and approval.” It may take “several weeks” for the case to be officially withdrawn, they said, adding: “That timeline is completely in the SEC’s control.”

The SEC declined to comment when asked for details about the Ripple lawsuit by Decrypt.

A federal New York court ordered Ripple to pay a $125 million fine for XRP sales to institutions in August. The penalty was far below the agency’s $2 billion request, and it’s unclear how the SEC dropping its appeal could impact the decision in the Southern District of New York.

The SEC’s legal about-face was widely expected.

Since SEC Acting Chair Mark Uyeda took over, the regulator has retreated from several enforcement actions, including its cases against the crypto exchanges Coinbase and Kraken.

If the SEC had been successful in its Ripple case, it could have had wide reaching impact on which cryptocurrencies should be classified as securities versus commodities.

Ripple Labs Chief Legal Officer Stuart Alderoty told Decrypt in October, before President Donald Trump’s reelection, that the SEC’s appeal “will backfire.”

While he believed the Second Circuit Court of Appeals would grant a favorable decision for the firm, he also noted that the SEC “can withdraw their appeal anytime they want.”

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

Edited by Stacy Elliott.