SEC May Appeal Ripple Case, Says Journalist—Senate Candidate Joins The Debate

As a seasoned analyst with over two decades of experience in the financial industry and a keen interest in blockchain technology, I find myself following the Ripple-SEC saga with great intrigue. Having witnessed numerous legal battles between regulatory bodies and tech giants, I am not surprised by the SEC’s apparent inclination to appeal the July 2023 ruling.


As a researcher, I’m closely monitoring the escalating courtroom drama between Ripple Labs and the U.S. Securities and Exchange Commission. There’s growing chatter suggesting that the SEC might consider filing an appeal, which could lead to further developments in this intriguing case.

In the summer of 2023, I found myself celebrating a significant milestone in my professional journey as Judge Analisa Torres’ decision on a landmark case was announced. The case revolved around Ripple’s distribution of XRP to common investors, and her ruling determined that these sales did not violate securities laws. As an analyst, this decision brings clarity and potentially opens new avenues for the digital asset industry.

It seems the Securities and Exchange Commission (SEC) appears displeased with this decision, given its potential impact on any future regulatory actions they might undertake.

The Potential Appeal Of The SEC

According to Eleanor Terrett, a journalist at FOX Business, a legal expert who previously worked for the SEC anticipates that the agency is likely to lodge an appeal on the ruling made.

Several individuals at the SEC, as stated by this lawyer, find the decision to have fundamental issues and think it should be reversed. The added pressure comes from the fact that October 7th marks the last day for submitting an appeal.

As a researcher, I’ve recently learned from a former SEC lawyer who has departed the agency that it’s likely the SEC will choose to appeal Judge Torres’s ruling from July 2023 regarding the $XRP programmatic sales in the Ripple case. The reasoning behind this potential decision is that those within the SEC genuinely hold the belief that their initial stance on the matter, which the ruling disputed, is more accurate and should be upheld.
— Eleanor Terrett (@EleanorTerrett) September 26, 2024

It’s more likely that the Securities and Exchange Commission (SEC) is focusing on potentially overturning the part of the ruling concerning XRP‘s automated sales, rather than contesting the $125 million penalty imposed on Ripple.

In the context of an appeal, Marc Fagel, a former SEC attorney, has expressed that the main point of emphasis would be understanding and evaluating whether these programmatic sales were properly deemed compliant with securities regulations.

This heavy focus could potentially shape upcoming laws regarding cryptocurrencies. There’s a strong probability that legal disputes will increase in the future, and legal expert Fred Rispoli predicts an approximately 3 out of 4 chance that the Securities and Exchange Commission (SEC) may decide to file an appeal.

SEC May Appeal Ripple Case, Says Journalist—Senate Candidate Joins The Debate

Ripple’s Response And Market Reactions

Despite the recent developments, Ripple’s management remains assured. They have expressed their belief that the issue is now resolved, as evidenced by CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty’s public statements indicating no intention to challenge the court’s verdict.

They contend that more legal wrangling could jeopardize capital formation and investor trust, two important facets of the SEC’s mandate.

The instability has led to a very fluctuating trend in the value of XRP across markets. Despite these small fluctuations, the price of XRP hovers around $0.59, significantly distant from any substantial departure from recent peaks.

As a crypto investor, I’m anxiously awaiting some clarity on the current situation, as the possibility of it going to an appeal has led to a decrease in trading volumes.

US Senate Candidate: Appeal Will Fail

Currently, Attorney John Deaton – a Massachusetts Senate candidate – has expressed his views on the Ripple case, stating that he believes any appeal of the ruling would be unsuccessful. Previously, Deaton played a significant role in Ripple’s legal victory regarding programmatic sales. In his opinion, the Second Circuit Court seems unlikely to overturn the existing decision.

His perspective is rooted in the interpretation of the Howey Test, where he emphasizes that the judge primarily focused on the third criterion: the presence of “anticipated rewards contingent upon the actions of others.

In reference to the sworn statements of approximately 3,800 XRP holders, Judge Torres correctly applied the third factor in her decision, as stated by Deaton.

The testimonials strengthened Ripple’s argument that their programmatic sales were not considered investment contracts, as they backed up Ripple’s stance – that XRP investors did not anticipate profits due to Ripple’s actions. Consequently, Deaton is confident that the Second Circuit will uphold the previous decision.

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2024-09-28 09:42