Ripple CLO Breaks Down Next Steps In US SEC vs XRP Appeal

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As a seasoned crypto investor with a knack for deciphering legal jargon and a penchant for predicting market trends, I find myself intrigued by the ongoing saga between Ripple and the SEC. Having weathered numerous market fluctuations and regulatory battles in the past, I’ve learned to keep my eyes on the horizon and my fingers crossed.

Stuart Alderoty, Ripple‘s Chief Legal Officer, has provided updates on the upcoming actions in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC).

2020 saw the filing of this case, which centers around classifying XRP as a security, and questioning whether Ripple carried out unregistered token sales in violation of U.S. laws. As the court battle moves to the appeals phase, both Ripple and the U.S. Securities and Exchange Commission are gearing up for an extended legal process that might stretch into 2026.

Ripple CLO Breaks Down Next Steps In US SEC vs XRP

At the yearly Swell gathering hosted by the agency, Alderoty clarified the ensuing phases of the appeal procedure, detailing the grounds for the agency’s appeal and Ripple’s counter-appeal. Stuart Alderoty mentioned that the SEC must submit Form C, specifying its intended prosecution, by October 16, 2024. In simpler terms, Alderoty explained the upcoming steps in the appeal process at the agency conference, highlighting the reasons for their appeal and Ripple’s response to it. He also shared that the SEC needs to submit a form, outlining what they plan to charge, by October 16, 2024.

Two weeks from now, our company will submit its own Form C, detailing our cross-appeal. We’ve stated our intention to contest the particular aspects of the initial ruling that classified certain XRP sales by institutions as unregistered securities trades.

Following the submission of Form Cs, the involved parties will arrange a time for their initial arguments. The United States Securities and Exchange Commission (SEC) is set to deliver its opening argument within the next 90 days, with the expectation that they may utilize the entire duration, making the first SEC brief due around mid-January 2025. The company will then respond, followed by their own argument. This sequence of arguments and rebuttals is anticipated to continue until the midpoint of 2025.

Confidence in the Second Circuit

On the contrary, Stuart Alderoty expressed confidence that Ripple’s legal standing is stronger, primarily due to the extended time frame. In his speeches at the Swell conference and various interviews, he conveyed that Ripple feels more assured about its case in the U.S. Court of Appeals for the Second Circuit than it did in the Southern District of New York.

Alderoty stated that he believes this appeal might backfire on the SEC, as he pointed out that most appeals in the Second Circuit result in upholding, rather than overturning, the original district court’s rulings.

He pointed out that the SEC’s attempt to seek clarification through this appeal could positively impact the whole cryptocurrency space as the ruling will set a legal precedence.

Ripple’s Cross-Appeal Focuses on Institutional Sales

The appeal by Ripple will focus solely on the decision made by Judge Analisa Torres regarding the institutional sale of XRP, which she deemed as a breach of securities laws. However, it’s important to note that Judge Torres decided that retail sales of XRP were not instances of unregistered securities offerings. In this case, Ripple disagrees with her ruling on institutional sales but agrees with her decision on retail sales.

The firm may contend that the institutional sales were not classified as “investment contracts” due to the absence of particular rights and duties, a crucial aspect used in American law to decide if a financial product qualifies as a security.

Alderoty stated that the goal is to establish a legal principle that clearly defines this difference, which he believes is essential and should be upheld by the law. He pointed out that trial courts have been hesitant in their interpretations to such an extent, but regardless, the Ripple CLO expressed that any decision made by the Second Circuit could potentially bring the desired clarity, irrespective of the outcome.

Beyond its ongoing court case with the SEC, the company is simultaneously growing its international business operations. During the Swell conference, the organization also shared plans for introducing a new stablecoin, RLUSD, a token pegged to the US dollar that aims to facilitate faster and more affordable cross-border transactions. This innovative digital currency will be regulated under New York’s stringent framework, which could provide an edge in regulatory compliance amidst growing scrutiny of other stablecoins.

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2024-10-16 01:56