• A former SEC lawyer is reported to be very confident that the regulator would appeal the 2023 programmatic sales of XRP ruling in the case against Ripple. 

• Attorney Jeremy Hogan has advised the SEC to deliberate on the relevance of the appeal in furthering its mandate. 

The multi-year-long legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs could take an unexpected turn and rejuvenate, as the latest reports suggest that the regulator is not yet satisfied with the 2023 ruling. According to Fox Business journalist Eleanor Terrett, a former SEC lawyer strongly believes that the Commission may likely appeal the ruling, especially concerning the XRP programmatic sales to retailers. 

🚨NEW: A former @SECGov lawyer who recently left the agency tells me the SEC will ‘probably’ appeal Judge Torres’s July 2023 ruling concerning the $XRP programmatic sales in the @Ripple case partly because: “everyone over there [at the SEC]truly believes that the decision is…— Eleanor Terrett (@EleanorTerrett) September 26, 2024

Recap of the SEC vs Ripple Case

For context, Ripple Labs was sued by the SEC in December 2020 for allegedly offering unregistered securities to investors. In July 2023, Judge Analisa Torres declared in a ruling that Ripple’s programmatic sales of XRP to retail investors via exchanges did not constitute a violation. However, she pointed out that 1,278 direct sales of the asset to institutional clients violated federal securities laws. For this reason, the court ordered the blockchain company to pay $125 million in civil penalties. 

On September 4, Ripple filed in the US District Court for the Southern District of New York to request a stay on the monetary portion of the recent judgment. As we extensively reported, Ripple mentioned in the filing that the SEC has agreed to delay the payment beyond the September 6 deadline. The company also proposed to deposit 111% of the judgment amount ($139 million) into the bank account. It is important to note that the money would remain there until 30 days. That is after the appeal period expires. 

Speculations of Appeal

Before the October 7 appeal deadline, several speculations were triggered, with experts weighing in the odds. One of them is pro-XRP lawyer Fred Rispoli, who believes that the odds have increased due to the recent complexities of the case. 

This is not a guarantee that there will be an appeal, but putting that kind of money in a trust is not something that is done unless the SEC is being evasive to Ripple lawyers as to whether it intends to appeal. Again, it is still possible that no appeal happens but odds have increased.

Meanwhile, Ripple’s Chief Legal Officer Stuart Alderoty recently declared that the four-year conflict has ended after the Commission admitted to having mentioned XRP in a mischaracterized manner. Alluding to this, attorney Jeremy Hogan also believes that the SEC “has lost the plot”, and its decision for appeal should be based on furthering its “mandate of investors protection.”

Of course, they think the opinion is wrong – they were on the losing side. What the SEC should be thinking of right now is whether an appeal furthers its mandate of investor protection and capital formation. Why isn’t that top of mind? More evidence the SEC has lost the plot.

Reacting to this development, XRP has made a marginal move up the price curve in the last 24 hours, with its seven-day surge currently around 0.24%. At press time, XRP was trading at $0.59. 

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