TL;DR
- The SEC has intensified its legal confrontation with Ripple by lodging an official appeal regarding a specific summary judgment.
- The firm’s chief legal officer compared the regulator’s determination to win the case to the tragic fate of Captain Ahab from Herman Melville’s Moby Dick.
What is the SEC Aiming For?
The ongoing legal conflict between Ripple and the US Securities and Exchange Commission (SEC) appears far from resolved following the agency’s latest actions. Remember that it recently filed an appeal against a 2023 ruling by Judge Analisa Torres, which concluded that the company’s XRP sales to retail investors on crypto exchanges did not breach US securities laws.
This development indicates that the case is transitioning into a new stage involving filings and a briefing process, with an official resolution likely delayed for several more years.
Several key figures in the industry have shared their insights regarding the potential implications of the appeal. One of them is Ripple’s chief legal officer — Stuart Alderoty. He stated that the Second Circuit Court of Appeals may either uphold Judge Torres’ ruling or broaden it.
“The best the SEC could possibly wish for (which is a long shot) is a remand,” Alderoty remarked.
The executive also detailed the SEC’s previous attempt to file an interlocutory appeal, which Judge Torres denied earlier this year. Then, the judge clarified that “Howey” and all of Ripple’s defenses, including Fair Notice, would then “be back on the table.”
“The Fair Notice criterion evaluates whether a person of ‘ordinary intelligence’ was knowledgeable about what the law prohibited. The SEC could find itself arguing to Judge Torres that she wasn’t a person of ‘ordinary intelligence’ when she ruled against them. Awkward,” Alderoty emphasized.
In the view of Ripple’s CLO, the lawsuit resembles the adventurous tale Moby Dick, with SEC Chairman Gary Gensler portrayed as Captain Ahab. For those unfamiliar with the narrative, Captain Ahab is a pivotal character driven by an obsessive pursuit of a specific white whale that had previously wounded him. His relentless quest, however, ultimately leads to his tragic demise and the destruction of his ship.
Alderoty believes that the recent developments have transformed the case into a blend of Moby Dick meets My Cousin Vinny (a comedy film that follows a rookie lawyer defending his cousin).
A Cowardly Move?
Another contributor to the discussion is US attorney Jeremy Hogan. He explained that the Commission’s appeal pertains to Ripple’s XRP sales on exchanges and the usage of the token as a payment method. Conversely, he pointed out that the SEC did not challenge its non-security designation.
Hogan characterized the SEC’s decision as a “cowardly move,” asserting that the agency “totally backed down when it had the chance to actually take the case against Garlinghouse and Larsen to a jury.”
“What I find noteworthy? This appeal centers around money. The injunction could shift if Ripple loses, but only indirectly (in terms of compliance orders),” Hogan concluded.
The post The Ripple v. SEC Case Resembles Moby Dick: The Company’s CLO Explains Why appeared first on CryptoPotato.
