In an ongoing saga of appeal and counter-appeal, renowned attorney Jeremy Hogan recently provided an in-depth analysis of the SEC’s decision to challenge the programmatic sales ruling in the Ripple case. Hogan was forthright in his critique, suggesting that the SEC’s choice to pursue this appeal could be a critical miscalculation. This move might not only impact this specific case but could also have lasting consequences for the SEC’s authority over the broader cryptocurrency market.
Why the Appeal Could Hurt the SEC
Hogan argues that the SEC is engaging in a high-stakes gamble by appealing the programmatic sales decision. According to his analysis, even if the SEC emerges victorious, the outcome will likely result in little more than increased financial penalties for Ripple. This, Hogan asserts, would not achieve the SEC’s primary goal of investor protection or contribute to regulatory clarity. “It will get more money from Ripple and have protected no one,” Hogan emphasized. Such a superficial victory would likely leave XRP’s utilization by Ripple largely unaffected, rendering the appeal strategically ineffective.
Ripple’s Strategic Play: The “Blue Sky” Laws
A key element of Hogan’s analysis is Ripple’s potential use of the “Blue Sky” laws, a strategy that could undermine the SEC’s regulatory reach. These laws, predating federal securities regulations, could serve as a powerful tool for Ripple. If Ripple successfully leverages this legal framework, Hogan warns that the SEC’s ability to oversee the entire cryptocurrency sector could be severely compromised. “The SEC’s ability to regulate the entire crypto space is essentially destroyed,” Hogan added. This scenario would deal a significant blow to the SEC, making their appeal a high-risk, low-reward endeavor.
Slim Chances for the SEC’s Success
From a statistical perspective, Hogan highlights the SEC’s low probability of success in this appeal. He attributes this to the robust, fact-heavy nature of the original ruling, which presents substantial hurdles for any attempt to overturn it. Even in the unlikely event that the SEC wins, Hogan notes that the consequences would be limited to Ripple incurring higher financial penalties, without any meaningful change to XRP’s regulatory status or its usage by Ripple.
Long Timeline for Resolution
For stakeholders hoping for a swift conclusion, Hogan offers a sobering timeline. He projects that a final verdict from the appellate court may not be reached until late 2025 or potentially early 2026. Initially, Hogan anticipated a decision by the summer of 2025, but he now concedes that the process is likely to be more protracted. As a result, the crypto community may face a prolonged period of uncertainty, with XRP’s legal status remaining unresolved.
Adding a layer of intrigue to the proceedings is the departure of SEC enforcement chief Gurbir Grewal on the same day the appeal was filed, a coincidence that Hogan finds noteworthy. He speculates that changes in leadership at the SEC could accelerate the case’s progress. In a lighthearted remark, Hogan suggested that a change in political leadership, such as a Trump re-election, might shift the SEC’s focus towards addressing more pressing concerns like scams and fraud.
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