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Cryptocurrency News Articles
Ripple vs SEC Lawsuit Nears Its Last Stage, October 7 Is the Final Date for the SEC to File an Appeal
Sep 30, 2024 at 01:07 am
The ongoing legal battle between Ripple Labs and the U.S. SEC has been a focal point for the cryptocurrency market. A lawsuit by the US SEC was filed in December 2020.
A US court has ruled that XRP sales to retail investors are not securities transactions, in a partial victory for Ripple Labs in its ongoing legal battle with the SEC.
In December 2020, the US SEC filed a lawsuit against Ripple Labs, alleging that the company conducted an unregistered securities offering by selling XRP tokens.
The SEC claimed that Ripple’s sales violated federal securities laws and sought to have XRP classified as a security.
However, in July 2023, Judge Analisa Torres of the Southern District of New York ruled that XRP sales to retail investors were not securities transactions.
In contrast, the court found that sales to institutional investors did constitute securities offerings.
Following the ruling, the court imposed a $125 Million fine on Ripple Labs in August 2024 for its failure to register XRP sales to institutional investors.
While the decision was seen as a partial victory for both Ripple and the SEC, it has left the door open for further legal challenges.
Recently, John E. Deaton, a prominent advocate for XRP holders, suggested that the SEC is unlikely to appeal the ruling.
His comments have sparked discussions within the crypto community and influenced market sentiment, leading to fluctuations in XRP’s price.
Here's a glance at how the XRP legal dispute played out and what it means for the crypto industry.
Implication Of The Ruling
The court’s decision has several implications for Ripple Labs. First, it allows Ripple to continue its operations without the immediate threat of being classified as a security for retail sales.
Second, the ruling sets a precedent that could influence how other cryptocurrencies are regulated by the SEC.
Projects similar to XRP may be heartened by the court’s distinction between retail and institutional sales.
However, the case also highlights the need for clearer regulatory guidelines, as the lack of clear definitions has left the door open for legal challenges.
The XRP legal dispute has also brought attention to the ongoing lack of legal and regulatory clarity for cryptocurrencies in the US.
As Of Now
The Ripple vs SEC lawsuit is near its last stage, with October 7 being the final date for the SEC to file an appeal.
Eleanor Terrett’s Report
Recently, Fox Business reporter Eleanor Terrett cited a former SEC attorney, who stated that the SEC will likely appeal Judge Torres’s ruling regarding the XRP programmatic sales.
According to the former SEC lawyer, the commission believes the ruling was flawed and should be appealed.
This adds to the speculation that the SEC might challenge the decision before the October 7 deadline.
John Deaton’s Analysis
In response to Eleanor's post, XRP holders' supporter John E Deaton shared his perspective on the likelihood of an SEC appeal.
Deaton argues that the SEC is unlikely to appeal Judge Torress’s ruling.
He points out that the decision was heavily based on specific facts and affidavits from XRP holders, which will be difficult for the SEC to challenge.
A critical element in this case is the standard enterprise requirement of the Howey Test, which is used to determine whether a transaction qualifies as an investment contract.
According to Deaton, the SEC struggled to prove this element, which is essential for classifying XRP as a security.
He also adds that even if an appeal court goes against Judge Torres’s ruling that XRP is an investment contract, the SEC will not win the case because the facts must meet all the Howey factors.
As someone who knows the @Ripple case very well, considering I was an active litigant for over 2 1/2 years, and considering Judge Torres cited my Amicus Brief, and the 3,800 XRP Holder Affidavits I submitted, as well as my efforts, as Amicus Counsel, in the @LBRYcom case (see… https://t.co/Ot7AgoFQh7
XRP Price Reaction
Following Deaton’s comments on the unlikelihood of SEC appeal in XRP price, there was a moderate decline.
However, uncertainty still surrounds a potential SEC appeal, and XRP’s price has been sensitive to news related to the SEC lawsuit.
Looking ahead, the SEC has until October 7 to decide whether to appeal the ruling.
If the SEC decides not to appeal, it could signal a shift towards more definitive regulatory guidelines for cryptocurrencies.
The information provided in this article is for informational purposes only. It should not be construed as legal or financial advice. The legal proceedings surrounding Ripple Labs are subject to change. Readers should conduct their own research before making any investment decisions.
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