As an analyst with over two decades of experience in the financial sector, I find myself intrigued by the ongoing Ripple vs SEC lawsuit. Given my extensive background in legal battles and market dynamics, I can confidently say that this case has potential implications beyond just XRP or Ripple Labs.
In the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), it’s been announced that the SEC is expected to submit their pre-trial statement (Form C) by October. This disclosure was made during the annual Swell Conference by Stuart Alderoty, Ripple’s Chief Legal Officer, as he discussed the forthcoming developments in the case.
Ripple vs SEC Briefing and Reply Cycles
This Form C serves to offer additional information concerning Ripple’s appeal strategy regarding the SEC’s dispute, along with what aspects they intend to challenge. In approximately two weeks, Ripple plans to submit a similar form, outlining its counter-appeal. The company has declared that it aims to argue against certain elements of the initial verdict which deemed the institutional and retail sales of XRP as unregistered securities trades.
After each party submits their Form C documents, they will set a meeting date for a briefing. The agency’s brief, which needs to be submitted first, is due in approximately 3 months (90 days), and the Commission plans to use this timeframe to prepare its legal arguments. Given that the Commission may also require 90 days to complete its work, the first submission of the Commission’s brief isn’t due until mid-January 2025.
Following this, Ripple will draft their response along with a summary. If things continue at this pace, the series of briefings and responses could stretch well into the early months of next year. Alderoty is optimistic that this extended timeline offers Ripple an advantage in building a robust legal argument. He underscored that Ripple feels more assured about their case in the US Court of Appeals for the Second Circuit compared to the Southern District of New York.
In simpler terms, the lawyer stressed that most appeals in the Second Circuit rarely lead to overturning the original district court’s ruling. Instead, those rulings are usually upheld or confirmed.
Alderoty stated that he believes the outcome of this case could backfire on the SEC, as it could establish a significant legal precedent within the cryptocurrency sector.
Ripple Is Confident of Potential Cross-appeal Victory
Should the decision of the Securities and Exchange Commission (SEC) favor them, certain activities within the cryptocurrency market could potentially be affected. For example, the prospects for a XRP Exchange Traded Fund (ETF) from Bitwise and Canary Capital might diminish substantially. Prior to the SEC’s announcement, Alex Thorn, Head of Research at Galaxy Digital, had already pointed out:
“The likelihood of this ETF filing succeeding drops to near zero if the SEC does appeal.”
In response to the SEC’s appeal, Ripple didn’t back down. Instead, it filed a counter-appeal last week. As John Deaton, Ripple’s representative, stated, this action was taken to leave no stone unturned. Essentially, Ripple remains optimistic that it will ultimately prevail in the lawsuit.
It is recommended that Chair Gary S. Gensler and the Securities and Exchange Commission (SEC) consider accepting the results of the Ripple case and refrain from initiating any additional appeals.
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2024-10-16 13:03