Ripple vs SEC: Will the SEC Appeal the XRP Case Verdict?

In the recent Thinking Crypto Podcast, Tony Edward interviewed Attorney Fred Rispoli, discussing the Ripple vs. SEC case updates. They explored the court’s verdict implications and future possibilities. Will the SEC appeal the Ripple XRP ruling?

• Ripple vs. SEC Case
• Can Ripple Still Sell XRP to U.S. Institutions?
• Will the SEC Appeal the XRP Case Ruling?

Ripple vs. SEC Case

On August 7th, District Judge Analisa Torres of the Southern District of New York delivered a landmark ruling, bringing the SEC’s lawsuit against Ripple to a close. The court has imposed a $125 million fine on Ripple and advised them to comply with securities laws in the future. This legal dispute dates back to November 2020, when the SEC alleged that Ripple raised $1.3 billion through unregistered sales of XRP tokens. Notably, the imposed fine is significantly lower than the SEC’s initial demand of $1.9 billion, although an appeal from the SEC is possible. This ruling marks a significant milestone in the cryptocurrency industry, setting a precedent for future cases involving unregistered token sales and securities laws.

Can Ripple Still Sell XRP to U.S. Institutions?

During the podcast, Tony Edward inquired if Ripple could continue selling XRP to U.S. institutions. Fred Rispoli responded that Ripple might still sell XRP in the U.S. and internationally, albeit cautiously. This stems from a previous ruling deeming institutional sales illegal. The judge categorized On-Demand Liquidity (ODL) sales as such, without elaboration. However, Rispoli pointed out that Ripple could argue their current sales differ from the previous controversial ones, implying they aren’t investment contracts. Although the SEC might contest this, Ripple could counter that recent rulings don’t prohibit these sales. This legal limbo highlights the complexity of cryptocurrency regulations and Ripple’s strategy to navigate them.

Will the SEC Appeal the XRP Case Ruling?

The discussion has also delved into the potential of the SEC appealing the Ripple XRP case ruling. According to Rispoli, although it’s a tough call, he believes that neither party is likely to pursue an appeal. He elaborated that an appeal might not be a prudent move for the SEC, as the weak factual basis of the case could undergo closer scrutiny, possibly resulting in unfavorable outcomes for them.

Rispoli emphasized the judge’s well-balanced fine decision; had it been excessively high or low, it might have triggered an appeal. The SEC could face challenges in appealing, particularly given the second circuit’s allowance for zero disgorgement. This circuit, which is a frequent venue for SEC cases, might not be supportive of an appeal initiated by the SEC. While Ripple could potentially argue that crucial contract details were overlooked, this alone might not guarantee a victorious outcome.

As the SEC has until early October to decide on whether to appeal, their next course of action remains uncertain. Stay tuned for further updates on this developing story, as the outcome could have significant implications for the cryptocurrency industry and beyond.