A pivotal moment in the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has emerged as a U.S. court set a firm deadline for the SEC, mandating the agency to submit its final reports by January 15.

This directive marks a significant step by the court to expedite proceedings in a case that has spanned nearly three years and holds substantial implications for the regulation of digital assets in the U.S.

The SEC has been locked in a prolonged legal confrontation with Ripple Labs since December 2020, when it filed a lawsuit alleging that Ripple’s sale of XRP constituted an unregistered securities offering. Ripple has contested these claims, maintaining that XRP should be categorized as a digital currency rather than a security. The outcome of this classification dispute is crucial, as a ruling against Ripple could set a precedent for regulating other cryptocurrencies under U.S. securities law, reshaping the regulatory landscape for the entire industry.

The U.S. Court of Appeals for the Second Circuit has instructed the SEC to submit its conclusive arguments by January 15, after which the court will evaluate motions to dismiss or continue certain aspects of the case. This deadline follows extensive rounds of arguments and evidentiary debates over the legal status of XRP and the SEC’s role in enforcing securities laws in the crypto sector. Ripple’s legal team has consistently argued that the SEC’s approach lacks clarity and that XRP does not fit traditional criteria for a security.