- The political considerations become crucial as global crypto exchanges begin to relist XRP.
- Experts state that decentralized entities primarily sell their tokens to retail investors through exchange platforms, making this outcome favorable for many assets targeted by the SEC’s regulatory actions.
In a recent tweet, the well-known legal authority James “MetaLawMan” Murphy offered valuable perspectives on the SEC v. Ripple case. He outlined four possible courses of action that the SEC could pursue following the ruling, hinting at an impending significant legal confrontation.
SEC v. @Ripple update.
There's a lot of debate about what the SEC will do next in the Ripple case.
I believe there are at least 4 options under consideration…
— MetaLawMan (@MetaLawMan) July 25, 2023
According to Murphy, the initial choice available to the SEC is to seek an interlocutory appeal, which requires approval from both Judge Torres and the Court of Appeals since a final judgment has not yet been issued. The SEC may favor this route due to significant political pressure on Gary Gensler to promptly overturn the current ruling, which has implications for other prominent cases involving major cryptocurrency players like Coinbase and Binance.
The second option involves the SEC proceeding with a trial on the aiding and abetting claim against Larsen and Garlinghouse before initiating a regular appeal. Alternatively, the SEC can immediately drop the claim against Larsen and Garlinghouse and proceed with an appeal without seeking permission.
Finally, there is the potential for a settlement, although Murphy currently doubts its feasibility. He highlights that the SEC might be hesitant to settle with Ripple because doing so would leave the crucial Torres precedent unchallenged on appeal. This precedent is fundamental to the SEC’s approach to regulating the crypto industry through enforcement actions, and settling could jeopardize their ability to establish and maintain this strategy.
The political considerations become crucial as global crypto exchanges begin to relist XRP, which puts the SEC in an unfavorable light and emboldens progressive Congressman Ritchie Torres and others to increase their criticism of Gensler.
The political considerations are important.
Crypto exchanges around the world are re-listing $XRP–making the SEC look bad.
Progressive Congressman Ritchie Torres & others have been emboldened to amp up criticism of Gensler.
This is all embarrassing for Gensler & his allies.
— MetaLawMan (@MetaLawMan) July 25, 2023
Murphy believes that the possibility of a settlement is unlikely because it’s difficult to envision the SEC reaching an agreement with Ripple while leaving Judge Torres’ precedent untested on appeal. In the end, Murphy thinks initiating the appeals process sooner rather than waiting for a year would benefit Ripple and the XRP community. He also expresses confidence in Ripple’s prospects during the appeal.
As the legal dispute between Ripple and the SEC persists, the cryptocurrency community will eagerly observe the unfolding events and await the next developments.
What Are The Broader Crypto Sector Implications of The Ruling
Depending on one’s perspective, the ruling provides a partial victory for both Ripple and the SEC. Ripple achieves a significant victory by having programmatic sales deemed not as securities, which could have positive implications for the broader crypto industry.
Experts state that decentralized entities primarily sell their tokens to retail investors through exchange platforms, making this outcome favorable for many assets targeted by the SEC’s regulatory actions.
However, the ruling does not answer the crucial question of what classifies a digital asset as a security. As a result, it remains uncertain whether this lawsuit will establish a precedent for other ongoing cases involving numerous digital assets.