Regulation

Why SEC’s Ripple Case Appeal Might Face a Delay

Published

1 year ago

October 20, 2023

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The U.S. Securities and Exchange Commission (SEC) has recalibrated its approach in the high-profile lawsuit against Ripple. The regulatory body dropped charges against CEO Brad Garlinghouse and Executive Chairman Chris Larsen. However, this move doesn’t mark the end of the entire case. The SEC maintains its stance against Ripple’s alleged violation by directly selling XRP to institutions.

SEC Postpones Appeal in Ripple Case

Eleanor Terrett, a Fox Business correspondent, highlighted an important aspect of the ongoing legal saga. The SEC isn’t poised to file an immediate appeal. The reason lies in the procedural norm that dictates waiting for a final judgment. Significantly, this judgment isn’t expected until the penalty phase concludes, a process potentially stretching into months. Consequently, any plans for an appeal are likely on hold until the following year.

Moreover, Terrett clarified that dismissing charges against individual executives doesn’t equate to the case’s complete dissolution. The SEC’s revision of its legal strategy reflects a nuanced approach, focusing on the company’s operations rather than its executives’ actions. This shift underscores the complexity and extended timeline expected before reaching any legal resolution.

Ripple, SEC Eye Potential Case Settlement

The case has seen Ripple score strategic points against the SEC. Most notable was Judge Torres’ decision in July, favoring Ripple by ruling that offering XRP to individual investors via exchanges didn’t violate federal securities laws. However, the court countered this by identifying the company’s direct sales to institutional investors as a violation.

Unsatisfied with the partial defeat, the SEC seeks to challenge the court’s decision not to consider XRP as a security. Additionally, both parties continue intricate legal discussions, parsing through details and exploring possible grounds for resolution. Ripple’s recent triumph, avoiding a court trial for its top executives, suggests a tilt in the legal scales.

Legal expert Fred Rispoli views these developments as paving the way for a possible settlement. As the legal skirmish enters its remedy briefing phase, discussions between Ripple and the SEC are set to intensify. Both parties are presumably more inclined towards a mutually agreeable resolution, avoiding further litigation. This scenario is becoming increasingly plausible as the case progresses, with implications for the broader cryptocurrency regulatory landscape.