Ripple Case: SEC Faces Deadline for Appeal Decision
The SEC has just days left to decide if it will appeal the Ripple case ruling, a move that could reshape crypto regulations in the US.
The debate over the SEC’s next move in the Ripple case is gaining momentum as the deadline for filing an appeal approaches. Pro-XRP attorney Fred Rispoli, founder of HODL Law, believes that the odds of an SEC appeal remain high compared to the agency letting the case close without further action. The SEC has until October 7 to decide whether to challenge the ruling by the US District Court for the Southern District of New York on August 7, 2024.
Rispoli shared his view on social media platform X, stating, “I’m 60/40 right now in favor of seeing an SEC notice of appeal. However, the stakes are really high for the agency.” If the SEC lets the ruling stand, it would confine the decision on “programmatic sales” to Ripple’s secondary sales only, limiting its broader impact. “Appealing and getting Ripple affirmed,” he said, “would give a significant boost to other litigants in the Second Circuit to argue that secondary sales do not constitute investment contracts.”
The ongoing discussion among XRP supporters and legal experts revolves around whether the SEC should redirect its efforts to stronger cases with a greater potential to shape the crypto industry. John Deaton, another pro-XRP lawyer, pointed out that the outcome of any SEC appeal will heavily depend on the three judges randomly assigned to hear the case. Rispoli concurred, adding that the SEC could win if it faces three judges who are “biased in favor of the SEC.”
Another commentator, @Wides71, suggested that the decision-making process might be influenced by deeper systemic biases within the judiciary. Rispoli agreed, noting that judicial bias has become more apparent over the last 15 years.
Rispoli’s analysis came after FOX Business journalist Eleanor Terrett reported on insights from a former SEC lawyer. The ex-SEC attorney believes the agency sees the court’s decision as flawed and should therefore be contested. The former lawyer argued that the reasoning behind the ruling was weak, making an appeal more likely.
Jeremy Hogan, another pro-XRP lawyer, criticized the SEC’s current approach. He emphasized that the agency’s primary focus should be on investor protection and capital formation, rather than merely winning cases. “Of course, they think the decision is wrong—they lost,” Hogan noted. But he argued that the SEC should be considering whether an appeal would advance its core mandate of protecting investors. “This isn’t even on their radar. The SEC has clearly lost its way,” he stated.
Ripple’s legal team has maintained that XRP sales should not be classified as securities transactions, a view that was partially upheld by the US District Court’s August ruling. However, the decision left room for interpretation, particularly in distinguishing between institutional sales and secondary market sales. An SEC appeal could set a more definitive precedent, potentially affecting other crypto companies facing similar scrutiny.
Legal analysts suggest that if the SEC goes ahead with an appeal and wins, it could broaden the definition of “investment contract” to include a wider range of digital assets, complicating the regulatory landscape for the entire industry. Such a ruling would also reinforce the SEC’s authority, allowing it to more aggressively regulate crypto markets. Conversely, if the SEC loses the appeal, Ripple’s victory would be solidified, making it more difficult for the agency to pursue similar cases in the future.
With the October 7 deadline approaching, the SEC’s decision will determine whether the legal battle will continue or if Ripple’s partial victory will stand. The crypto community is watching closely, as the outcome could reshape the regulatory environment for years to come.
Ripple’s case has already made waves, raising critical questions about how digital assets should be treated under US law. The implications of an appeal go beyond Ripple and could have far-reaching consequences for the future of the industry.
The stakes are high, and time is running out. Investors, legal experts, and crypto enthusiasts are eagerly awaiting the SEC’s next move, which could mark a pivotal moment in the ongoing tug-of-war over how cryptocurrencies are regulated.
