The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has generated significant interest within the crypto community. With the recent request for an interlocutory appeal by the SEC, legal experts have been analyzing the potential outcomes and their broader implications. Let’s delve into the possible scenarios that could unfold, drawing insights from lawyers James “MetaLawMan” Murphy, Bryan Jacoutot, and Bill Morgan.
One likely scenario is that Ripple opposes the motion to certify the appeal. MetaLawMan suggests that Ripple’s confidence in the correctness of Judge Torres’ decision forms the foundation of this stance. By opposing the appeal, Ripple would signal its belief that the decision aligns perfectly with the company’s legal stance, particularly regarding secondary market sales of XRP.
There are several reasons to support this scenario. First, Ripple does not want to agree with the premise that there are “substantial grounds for difference of opinion” on Judge Torres’ ruling, which is part of the legal standard for certifying an interlocutory appeal. Second, there is a slim possibility that Congress may enact a crypto law that redefines the original institutional sales of XRP as non-securities transactions, based on the argument that institutional buyers did not receive equity or legal rights to participate in Ripple’s profits. Third, a change in administration could bring a fresh perspective to the SEC’s approach to crypto enforcement actions, potentially resulting in an immediate dismissal of the case or a settlement favorable to Ripple.
Alternatively, Ripple could agree to the interlocutory appeal, acknowledging the inevitability of appeals in this case. The question then becomes one of timing: whether the appeals process will be initiated immediately or deferred until after the trial of Ripple executives Brad Garlinghouse and Chris Larsen.
Related Post
An additional possibility is that Ripple seeks a cross-appeal on the institutional sales claim while agreeing to the interlocutory appeal. MetaLawMan explains that if the 2nd Circuit were to reverse the SEC’s win on this claim, it would eliminate the need for a trial on aiding and abetting the institutional sales. Lawyer Bill Morgan emphasizes the significance of Judge Torres’ decision concerning sales to On-Demand Liquidity (ODL) customers, as all Ripple sales post-June 2020 were to ODL customers, amounting to a significant $3 billion post-complaint. Given the financial implications and the SEC’s intention to target this sum, Morgan believes Ripple should consider appealing this part of Judge Torres’ decision.
Looking further ahead, Bryan Jacoutot draws attention to the Terraform Labs case, which could significantly impact Judge Torres’ decision. Jacoutot points out that the SEC’s citation of the Terraform case is notable because it challenges Judge Torres’ analysis, particularly her distinction between institutional sales and “programmatic sales.” This intra-district dispute between the XRP decision and the Terraform decision could make the current case a prime candidate for an interlocutory appeal. If Judge Torres accedes to the SEC’s request, it would allow the 2nd Circuit Court of Appeals to provide input on this crucial matter. Furthermore, Jacoutot highlights the potential streamlining of the appellate process if the interlocutory appeal is granted, resulting in a more expedited and definitive ruling on the validity of Torres’ “blind bid/ask” Howey theory.
At present, the price of XRP remains relatively stable, trading at $0.6344. The outcome of the legal battle between Ripple and the SEC will undoubtedly have significant implications for the future of the cryptocurrency industry.
