The US Securities and Exchange Commission (SEC) is refusing to back down in its fight against Ripple Labs, formally appealing aspects of a July court ruling that largely favored the blockchain company and its XRP cryptocurrency.
The appeal, filed on October 17, 2024, throws XRP’s future into further uncertainty and sets the stage for a protracted legal battle that could last until July 2025.
Despite a judge’s declaration that XRP itself is not a security, the SEC is challenging the court’s decision regarding specific types of XRP sales. The appeal focuses on programmatic sales of XRP on digital asset platforms and distributions to Ripple employees, arguing that these constitute unregistered securities offerings.
What’s at Stake
The outcome of this appeal has significant implications for the entire cryptocurrency industry. A ruling in favor of the SEC could drastically reshape the regulatory landscape, potentially impacting how other digital assets are classified and traded. It could also hinder the development of XRP-based exchange-traded funds (ETFs) and affect the operations of other crypto companies.
Conversely, a victory for Ripple could further solidify the argument that not all cryptocurrencies are securities, potentially paving the way for greater innovation and adoption within the industry.
After peaking in March the XRP price trended down until the ‘not a security’ court decision in July sent it soaring. The latest SEC appeal will now ensure uncertainty continues until at least mid-2025. Source: Brave New Coin XRP Liquid Index
Timeline for Resolution
Ripple’s Chief Legal Officer, Stuart Alderoty, confirmed the company will file its response, including arguments for a cross-appeal, within a week. Following this, a lengthy briefing process will begin, with the SEC having up to 90 days to submit its opening brief.
Based on this projected timeline, a final decision from the appeals court is not expected until mid-2025. This extended legal battle leaves XRP in a state of limbo, potentially hindering its growth and adoption as investors and developers await regulatory clarity.
SEC’s Weakened Position?
Some legal experts believe the SEC’s position is weakened by its own recent actions. In a separate lawsuit against Binance, the SEC acknowledged that its use of the term “crypto asset security” is controversial and that not all crypto tokens are securities. This admission could undermine the SEC’s arguments in the Ripple appeal and other ongoing cases against crypto exchanges.
Ripple Remains Confident
Despite the ongoing legal challenges, Ripple CEO Brad Garlinghouse has hinted at a potential Initial Public Offering (IPO) for the company, contingent on the resolution of the SEC lawsuit. This suggests confidence in Ripple’s long-term prospects and its ability to navigate the regulatory landscape.
The Ripple vs. SEC case continues to be a pivotal moment for the cryptocurrency industry. Its outcome will have a profound impact on the future of digital asset regulation and innovation. All eyes will be on the courts as this landmark case enters its next phase.
Source: https://bravenewcoin.com/insights/sec-pushes-back-against-ripple-ruling-prolonging-xrps-legal-limbo