Ripple vs SEC: Court Grants Motion to Place Appeal In Abeyance

In a major development, the United States Court of Appeals for the Second Circuit has approved a joint request from Ripple Labs and the U.S. Securities and Exchange Commission (SEC).

This request asks the court to pause the ongoing appeal in their legal dispute. The SEC is now required to file a status report within 60 days.

Ripple Lawsuit Latest Update

The ruling, signed by Judge José A. Cabranes, confirmed that no legal arguments or decisions will be made while the appeal is on hold.

Instead, the SEC must file a status report within 60 days, offering an update on the situation.

The legal battle between Ripple and the SEC started in December 2020.

The regulatory agency once accused Ripple of selling unregistered securities of XRP, its associated token, earning over $1.3 billion in profit.

Ripple fought back, asserting that XRP is a currency, not a security. The company also partly argued that its operation is beyond the SEC’s jurisdiction.

In July 2023, Judge Analisa Torres ruled that selling XRP on public exchanges differed from selling securities.

Also, the court found that Ripple’s institutional XRP sales violated securities laws, leading to a proposed $125 million fine.

Recently, both parties agreed to drop their respective appeals. Ripple agreed to pay a reduced fine of $50 million, a big decrease from the original $125 million.

Meanwhile, the decision to pause the case came as the SEC experienced major leadership changes.

When Gary Gensler, the former SEC Chair, stepped down, the agency dismissed its case against Ripple, a statement on its pro-crypto stance.

The company also dropped its cross-appeal, meaning both sides stepped back from continuing the legal fight.

The latest delay in the final resolution has frustrated some XRP supporters. Many thought the case was nearly over, and this new development would extend it further.

According to CoinMarketCap data, XRP’s price dropped by 1.6% in the last 24 hours after the announcement, trading by $2.11.

Notably, the broader crypto market is also facing a bearish trajectory, which may affect XRP’s value. However, experts predict the asset’s price could hold the current price level and rally.

What Next for Ripple Labs

Now that the appeal is on hold, pending the final conclusion from the Commission, Ripple can focus more on its business operations.

The company is rumored to expand its services and explore new opportunities, including a potential Initial Public Offering (IPO).

In addition, the firm is backing a new XRP Exchange-Traded Fund (ETF) from top asset managers.

A few days ago, CEO Brad Garlinghouse announced that the company had bought Hidden Road for a total of $1.25 billion.

This is one of Ripple’s biggest steps in expanding its business to the traditional brokerage scene.

The US SEC Redemption

The SEC’s decision to pause and end the Ripple case shows that its approach to crypto is changing.

With Paul Atkins as the newly confirmed US SEC Chair, the agency will likely be more open and friendly toward the crypto industry.

The regulatory agency has also ended class actions against crypto firms, including Coinbase, Uniswap, and Kraken.

This change shows that the SEC is rethinking its approach to digital assets. It aims to provide clearer rules, encourage innovation, and protect investors.

The outcome of the Ripple case has already set a precedent for how the SEC will deal with similar cases in the future.