Is an SEC Appeal Likely in the Ripple (XRP) Lawsuit? Expert Weighs In

TL;DR

• An appeal by the SEC appears increasingly probable, with an expert estimating its chances at 60%.
• Nonetheless, he hasn’t demonstrated the strongest track record regarding this specific case.

Is an Appeal Imminent?

In light of recent developments, the legal clash between Ripple and the U.S. Securities and Exchange Commission (SEC) is still ongoing. A pivotal ruling transpired in August, where Federal Judge Torres concluded that XRP sales on secondary markets to retail investors were not deemed securities transactions. However, she mandated that Ripple pay $125 million for breaching certain securities regulations.

This amount is merely a fraction of the $2 billion the regulator originally demanded. This led to speculation regarding the agency’s intention to appeal the ruling before the October 7 deadline.

Recently, Eleanor Terrett, a Fox Business journalist, stated that a former SEC attorney informed her that the agency will likely contest Judge Torres’ ruling from July 2023 regarding “the XRP programmatic sales in the Ripple case.” The lawyer purportedly argued that “everyone over there [at the SEC] genuinely believes that the decision is wrong, that it’s not sound law, and should be appealed.”

Most recently, attorney Fred Rispoli asserted that the likelihood of such an eventuality has increased to 60%. He argues that a “no appeal” outcome would imply that “programmatic sales” become “a unique loss that primarily pertains to Ripple’s secondary transactions and represents a distinct SDNY loss for the SEC.”

“If they appeal and succeed in getting Ripple upheld, it provides a significant advantage to all litigants in the 2nd Circuit contesting the SEC (which covers all of NY and the SEC’s favorite) to assert that all secondary sales are not investment contracts,” he added.

Rispoli’s Earlier Insights

Earlier this year, Rispoli anticipated that the litigation between Ripple and the SEC would conclude at the end of July, involving a $25 million fine for the company. However, as mentioned, the case continues.

Rispoli also commented on Ripple’s request (submitted in mid-September) for a stay on the financial component of the Court’s Judgment. He indicated that this development could serve as a precursor to a possible appeal by the SEC:

“Undergoing all this effort to create a trust for the funds enhances the likelihood of an appeal in my opinion. However, ultimately, this is merely the most cautious strategy for the SEC to buy time until the October 7 deadline for filing an appeal.”