Major Development in Ripple’s Legal Battle Over XRP
In August, Ripple’s prolonged legal tussle concerning XRP witnessed a significant breakthrough. However, the saga might be far from over as the U.S. Securities and Exchange Commission (SEC) is likely to appeal, potentially ushering in a new chapter. Insight from former SEC attorneys sheds light on the agency’s potential appeal strategy, particularly focusing on programmatic sales and their classification as unregistered securities.
Potential Appeal by the SEC
Fox Business journalist Eleanor Terrett recently took to her X handle to disclose information from a former SEC lawyer who recently exited the agency. The source indicates that the SEC will “probably” appeal Judge Torres’s July 2023 ruling on XRP programmatic sales in the Ripple case. According to him, many within the SEC believe that the ruling is flawed, constitutes bad law, and warrants an appeal. Terrett further divulged, “Going to do a deeper dive into the SEC’s options and what we could see as we near the October 7th appeal deadline.”
Reactions from the XRP Community
Unsurprisingly, the SEC’s inclination to appeal the ruling has sparked varied reactions within the XRP community. Attorney Jeremy Hogan voiced his sentiments, stating, “Of COURSE they think the opinion is wrong – they were on the losing side. What the SEC SHOULD be thinking of right now is whether an appeal furthers its mandate of investor protection and capital formation. Why isn’t that top of mind? More evidence the SEC has lost the plot.”
Judge Torres’s Ruling and Its Implications
Judge Analisa Torres’s ruling on July 13, 2023, marked a pivotal moment in the case. She determined that Ripple’s direct sales of XRP to institutional investors, referred to as Institutional Sales, were indeed securities transactions. In contrast, sales conducted on digital asset trading platforms, known as Programmatic Sales, were not considered securities.
Mixed Reactions from the Community
The XRP community had mixed responses to this development. While some saw it as a partial victory, others expressed concerns about its implications for future regulatory actions. Jeremy Hogan, an attorney closely following the case, noted the SEC’s seemingly misplaced focus, stating that the agency should prioritize its mandate of investor protection and capital formation.
Conclusion of the Four-Year Conflict
For those unfamiliar with the case, Stuart Alderoty, Ripple’s Chief Legal Officer, recently announced the conclusion of this four-year-long legal battle. Interestingly, the SEC even issued an apology for mischaracterizing XRP. Despite this, the SEC has yet to confirm whether it will appeal the recent rulings in the SEC vs. Ripple case. Both Ripple and the SEC have a 60-day window to file appeals, with the deadline set for October 7, marking 60 days after the final judgment.
