A former Securities and Exchange Commission (SEC) lawyer predicted that the agency will likely appeal the Ripple case. The focus of the appeal is expected to be the July 2023 ruling by U.S. District Judge Analisa Torres, which found that secondary sales of XRP tokens did not qualify as securities. This decision has been controversial within the SEC, with many at the agency reportedly believing the ruling was incorrect.
The prediction of an appeal comes as the SEC’s deadline for October 7 approaches. This ruling that distinguished between sales of XRP that were attributable ‘directly and primarily’ to the company and those ‘indirectly and secondarily’ has been criticized, including by U.S. District Judge Jed Rakoff, who scotched the notion that the method of token sale should make a difference to its status as a security or not.
Ripple Lawyer Confident Despite Possible Appeal
Ripple’s CSO, Stuart Alderoty, has said that an appeal by the SEC will not come as a surprise, and although the company awaits its disposition, they believe that the legal status of XRP will not be altered. However, Aldefer disagrees with Alderoty and believes that Judge Torres’ decision remains the Field of Law. An appeal will not change the primary ruling of XRP as non-security in secondary markets.
However, an appeal could lead to discussions around the legal status of cryptocurrencies under the U.S. federal securities legislation, which has grown increasingly critical for the emerging digital asset market. The appeal by the SEC will attract more attention to the original decision and might result in better elucidation.
The SEC has yet to file the appeal as the deadline approaches; therefore, the Ripple case is one of a kind that will determine the legal status of cryptocurrencies. If the SEC pursues the appeal, the long-term consequences will affect the industry as a whole.
Final Thoughts
The potential SEC appeal of the Ripple case highlights a pivotal moment for the cryptocurrency industry, particularly in how digital assets are classified under U.S. securities law. Judge Torres’ ruling, which found that secondary sales of XRP tokens did not constitute securities, set a significant legal precedent.
However, the SEC’s continued dissatisfaction, supported by Judge Rakoff’s critique, underscores the ongoing debate about whether the method of sale should determine a token’s legal status. An appeal could force further clarification, which many believe is necessary given the lack of regulatory clarity in the fast-evolving digital asset space.
If the SEC does file the appeal, it could lead to broader discussions around the federal securities legislation and its applicability to cryptocurrencies. This could bring much-needed regulatory attention to the industry, but it also introduces uncertainty.
Ripple remains confident that the appeal won’t change the core ruling on XRP’s status in secondary markets, but the case itself has the potential to shape how cryptocurrencies are treated in the U.S. moving forward. The outcome could set a far-reaching precedent, either reinforcing the existing decision or altering the legal landscape for digital assets across the industry.
Article Source: 36crypto
