TL;DR
- A potential appeal by the SEC is becoming more likely, with one expert estimating a 60% chance.
- However, he doesn’t have the best track history when it comes to this particular case.
An Appeal on the Horizon?
Despite the recent developments, the legal battle between Ripple and the US Securities and Exchange Commission (SEC) remains ongoing. The latest important ruling occurred in August when Federal Judge Torres determined that the sales of XRP on secondary markets to retail investors did not constitute securities transactions. However, she ordered Ripple to pay $125 million for violating certain securities laws.
The amount represents just a fraction of the $2 billion the regulator initially insisted on. This caused speculation that the agency would appeal the decision before the October 7 deadline.
Last week, Eleanor Terrett (a journalist working for Fox Business) said a former SEC attorney told her that the watchdog will “probably” contend Judge Torres’ ruling from July 2023 concerning “the XRP programmatic sales in the Ripple case.” The lawyer supposedly argued that “everyone over there [at the SEC] truly believes that the decision is wrong, that it’s not good law, and should be appealed.”
Most recently, American attorney Fred Rispoli claimed that the chances of such a scenario had risen to 60%. He believes a “no appeal” would mean that “programmatic sales” is “a one-off loss that literally only applies to Ripple’s secondary sales and is a distinguishable SDNY loss for the SEC.”
“Appealing and getting Ripple affirmed is a huge gift to all litigants in the 2nd Cir fighting the SEC (all of NY and SEC’s favorite) to argue all secondary sales are not investment contracts,” he added.
Rispoli’s Previous Take on the Matter
Earlier this year, the lawyer predicted that the lawsuit between Ripple and the SEC would officially finish at the end of July following a $25 million penalty for the company. As mentioned above, though, the case goes on.
Rispoli also responded to Ripple’s motion (filed in mid-September) requesting a stay on the monetary portion of the Court’s Judgment. He suggested the development could be a precursor of a potential appeal by the SEC:
“Going through all this effort with establishing a trust for the funds boosts chances of an appeal IMO. But ultimately, this is just the safest play for SEC to buy time until the Oct. 7 deadline to appeal.”
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