In a recent Twitter thread, Fred Rispoli, a well-known lawyer in the XRP community, shared his insights into the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). Rispoli’s comments suggest that the highly anticipated trial between Ripple executives Brad Garlinghouse and Chris Larsen and the SEC may never actually take place.
Rispoli believes that the SEC’s initial strategy was more tactical than substantive. He stated that suing Garlinghouse and Larsen was likely done to pressure Ripple into a weak settlement position. This indicates that the SEC may not have been genuinely seeking justice but rather aiming to corner Ripple into a vulnerable position.
Furthermore, Rispoli discussed the potential spectacle of bringing former SEC officials William Hinman and Jay Clayton to the witness stand. The Hinman documents have raised questions about potential corruption and questionable practices at the SEC. Rispoli suggested that tying Hinman and Clayton to their roles in the “Trump Administration” could be compelling to a jury in New York City.
Rispoli also pointed out the inherent challenges the SEC would face in proving its case. For instance, proving recklessness regarding institutional sales becomes difficult for the SEC when Ripple can counter-argue by pointing to programmatic sales, which are generally considered above board. Additionally, the SEC’s weak distinction between domestic and international sales may not hold up in court.
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Adding to the SEC’s challenges, Rispoli mentioned the recent reorganization of the SEC’s trial team. Internal shifts like this can indicate a lack of preparedness or confidence on the SEC’s part. Furthermore, the SEC’s back-to-back trial schedule could strain its resources, making it less likely for them to be adequately prepared for a high-stakes trial against Ripple.
Rispoli summarized his analysis of the SEC’s position by suggesting that the SEC had gone all in, and if their strategy doesn’t work, they may struggle to find a face-saving exit.
The Twitter thread sparked various questions from the XRP community. One user asked about the expected timeline for the appeal. Rispoli responded that previous rulings on interlocutory appeal requests have taken Judge Torres four to six weeks. This gives an estimated timeframe for when a decision on the appeal may be made.
Another user inquired about the possibility of the SEC dropping part of the case. Rispoli explained that while it is possible, the SEC would need permission from the court to do so. It would be embarrassing for the SEC to simply “drop” a claim, and it is unlikely that they would take such a step without a compelling reason.
When asked about the potential financial penalties Ripple might face, Rispoli admitted that it is a complex issue. There is speculation of a $700+ million penalty, but the specifics will be litigated in the remedies phase of the case.
At the time of writing, the price of XRP was $0.5098, having fallen below the 200-day EMA.
In conclusion, Fred Rispoli’s Twitter thread shed light on the ongoing legal battle between Ripple and the SEC. His analysis suggests that the much-anticipated trial between Ripple executives and the SEC may never happen. Rispoli highlighted the SEC’s tactical approach, potential vulnerabilities in their case, and the challenges they face. The thread also addressed questions from the XRP community regarding the timeline for the appeal, the possibility of the SEC dropping part of the case, and potential financial penalties for Ripple.
