In a revealing session on Crypto Law TV, attorney James Murphy, also known within the industry as “MetaLawMan,” engaged in an insightful conversation with host Kristi Warner. Their discussion revolved around the current status of the XRP lawsuit involving Ripple Labs and the United States Securities and Exchange Commission (SEC). Murphy delved into the SEC’s recent appeal and scrutinized potential strategies Ripple might consider in response.
SEC’s Appeal: A Closer Look at the Ripple Lawsuit
Murphy began by expressing his expectations regarding the SEC’s decision to appeal Judge Analisa Torres’ summary judgment. The judgment had controversially ruled that while Ripple’s institutional sales of XRP were unregistered securities, XRP itself did not qualify as a security. “I anticipated the SEC would appeal,” Murphy remarked, “Whenever a party loses some or all of a case, an appeal is usually considered after the final judgment is rendered.”
Addressing the SEC’s attempt at an interlocutory appeal—a legal move to appeal before a case concludes—Murphy highlighted the SEC’s evident dissatisfaction with the initial ruling. “The SEC was taken aback by Judge Torres’ ruling that XRP is not a security, prompting them to seek an immediate appeal,” he observed.
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Key Issues in the SEC Appeal
Murphy outlined the primary issues he believes will be central to the SEC’s appeal. Chief among these is the SEC’s likely disagreement with Judge Torres’ finding that transactions involving XRP on secondary markets did not constitute investment contracts. “This is almost certainly the main issue that the SEC will contest on appeal,” Murphy predicted.
Another potential focal point for the SEC could be the judge’s decision to award zero disgorgement. Disgorgement is a remedy that requires the violator to return any illicit gains. Murphy noted that recent Second Circuit Court of Appeals precedents stipulate that victims must have suffered monetary losses for disgorgement to be applicable. “The SEC lacked evidence of such losses… Retail XRP holders were the ones adversely affected,” he explained.
Murphy also touched on the SEC’s possible challenge to the $125 million civil penalty levied against Ripple, though he deemed this a less probable line of argument. “I consider this a particularly weak argument… Judges generally have broad discretion in such matters,” Murphy commented.
Ripple’s Potential Cross Appeal: Strategic Considerations
Murphy also reflected on the potential for a cross-appeal by Ripple, a move hinted at by Ripple’s CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty. Reports from Bitcoinist suggest this could be a strategic maneuver. Murphy expressed strong support for this potential cross-appeal, especially regarding the classification of institutional sales as investment contracts.
“I am a staunch advocate for a cross-appeal in this situation,” Murphy asserted. He argued that institutional buyers acquired XRP at wholesale rates for resale purposes, similar to how wholesalers purchase commodities like oranges or diamonds, rather than as investments in Ripple’s business. “These buyers were not investing in Ripple; it’s not an investment contract,” he emphasized.
Timeline and Potential Industry Impacts
Murphy provided an elaborate timeline for the appeals process, detailing specific deadlines for both parties to file their briefs and outline the issues for appeal. He projected that a conclusive decision from the Second Circuit Court of Appeals might not be reached until the first quarter of 2026. “Typically, the process takes a little over a year… My estimate is that we will see a decision by early 2026,” Murphy forecasted.
He also mentioned the likelihood of various industry stakeholders submitting amicus briefs, which could potentially protract the timeline. “I anticipate numerous amicus briefs will be filed… Coinbase appears to be signaling the significance of this case,” Murphy noted.
At the time of writing, XRP was trading at $0.52, maintaining its position above the trend line on the one-week chart.
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