Ripple’s XRP Faces Potential SEC Appeal: Legal Experts Weigh In on the Ripple vs SEC Case

Recent developments in the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) have sparked intense speculation regarding the agency’s potential appeal of Judge Analisa Torres’ summary judgment concerning XRP. Pro-XRP attorney John Deaton and several legal experts have weighed in on the likelihood of the SEC succeeding in such an appeal, particularly focusing on the implications for XRP’s programmatic sales.

The discussion surrounding a possible appeal has gained momentum, especially after a former SEC lawyer suggested to Fox Business journalist Eleanor Terrett that the agency is likely to challenge the ruling made by Judge Torres in July 2023. This ruling has been viewed as a significant victory for Ripple and the broader cryptocurrency community, as it established that XRP is not considered a security when sold in secondary markets.

Deaton, who is representing approximately 75,000 XRP holders in this legal dispute, highlighted that judges have previously criticized the SEC for its inconsistent application of the law. He expressed skepticism about the SEC’s decision to pursue an appeal, labeling it as a potential misuse of taxpayer funds. “I doubt an appellate court would find Judge Torres made an error in her application of the law,” Deaton remarked, underscoring the fact-specific nature of the ruling. He noted that the SEC did not present any expert testimony regarding XRP holders, which was notably excluded from the case.

Despite Deaton’s confidence in Judge Torres’ ruling, he warned that if the Second Circuit Court were to find any error in the application of the law, the case would revert back to Judge Torres. In such a scenario, he believes the SEC would ultimately fail again, as the district court would likely conclude that the SEC did not demonstrate a ‘common enterprise’ necessary for establishing a securities violation.

Legal analyst Fred Rispoli echoed Deaton’s sentiments, asserting that overturning the Torres ruling would present a formidable challenge for the SEC. He indicated that the fate of the appeal would heavily depend on the three judges randomly selected to hear it. “If the SEC were to draw three judges with a bias towards the agency, which is rare but possible, there might be a chance of winning,” Rispoli explained.

The prospect of a last-minute appeal notice from the SEC is a point of concern for Ripple and its supporters. Legal experts, including Bill Morgan and Jeremy Hogan, have suggested that if the SEC chooses not to appeal, it would represent a significant triumph for Ripple and the XRP community. Such an outcome would enable them to argue that all secondary sales of XRP do not constitute investment contracts, thereby further legitimizing the cryptocurrency’s status in the market.

In the wake of these developments, XRP has seen a notable uptick in its trading activity. Over the past 24 hours, the price of XRP has increased by 2%, currently sitting at approximately $0.605. The cryptocurrency’s trading range for the day has fluctuated between $0.586 and $0.611, reflecting heightened interest from investors. Moreover, trading volume surged by 21% during the same period, indicating intensified market engagement. Analysts project that if the SEC’s appeal fails, XRP’s price could target $2, marking a significant rally for the asset.

The Ripple vs. SEC case has not only captured the attention of the cryptocurrency community but also holds broader implications for the regulatory landscape surrounding digital assets in the United States. As the SEC continues to grapple with its approach to cryptocurrency regulation under the leadership of Chairman Gary Gensler, the outcome of this case may set crucial precedents for future regulatory actions.

The stakes are high for both Ripple and the SEC, as the resolution of this legal dispute could reshape the dynamics of the cryptocurrency market in the U.S. Ripple’s growing influence in the financial technology space, combined with its ongoing legal challenges, places it at the forefront of debates about regulatory clarity and market integrity.

Should the SEC decide to press forward with its appeal, the legal battles are far from over, and the cryptocurrency community will be closely monitoring the developments. The outcome of this case may not only impact Ripple and XRP but also influence how regulatory bodies approach other cryptocurrencies and blockchain technologies in the future.