Leaked Emails Reveal SEC’s 2021 Cold Feet: Did Regulators Panic Over XRP’s Survival?

Behind-the-scenes doubts surface as internal SEC communications from 2021 show unease about Ripple’s potential collapse—just as the agency was hammering them with lawsuits. Were regulators more worried about systemic fallout than investor protection? Classic.

Subheader: The Paper Trail That Could Rewrite Crypto History

The emails—leaked four years later—paint a picture of regulators scrambling to assess whether killing XRP might accidentally nuke the crypto markets they’re supposed to police. Turns out even bureaucrats understand ’too big to fail’ when staring down a $40B+ asset.

Subheader: Irony Alert: SEC’s Own Lawyers Saw the Contagion Risk

While publicly insisting XRP was just another ’unregistered security,’ internal discussions reportedly fretted over liquidity crunches and exchange domino effects. Nothing says ’prudent oversight’ like realizing mid-crackdown that your target might be holding up the entire casino.

Ripple’s long legal battle with the U.S. Securities and Exchange Commission (SEC) may have wrapped up in the company’s favor, but newly released documents show how deeply the agency once worried about the future of XRP.

According to a fresh batch of files obtained through a Freedom of Information Act (FOIA) request by Coinbase, SEC officials were actively debating the stability and security classification of various crypto assets back in 2021. Among them, XRP was very much on their radar.

As reported by The Block, in one internal email, SEC officials questioned what might happen if Ripple, the company behind XRP, suddenly “walked away” or “disappeared.” The agency appeared concerned about what risks could surface for the XRP blockchain in such a scenario — a rare behind-the-scenes glimpse into how regulators were viewing crypto projects under pressure.

At the time, the SEC had already kicked off a major lawsuit against Ripple, accusing it of operating illegally by selling XRP as an unregistered security. While Ripple has since emerged victorious from that battle — even winning back some of the penalties it had previously paid — these newly uncovered emails show just how uncertain regulators were about the decentralization and resilience of the XRP network itself.

The revelations come amid a broader series of disclosures this week from Coinbase, which published dozens of SEC communications related to crypto oversight as part of its own ongoing legal standoff with the agency.

This isn’t the first time SEC deliberations on crypto assets have made headlines. The same document dump also revealed how, in 2023, the New York State Attorney General had formally asked the SEC to declare Ethereum’s Ether (ETH) a security — a request that was ultimately ignored.