The United States Securities and Exchange Commission (SEC) has officially commenced an appeal process against the final ruling in its case involving Ripple Labs. As of now, the specific grounds for the SEC’s appeal remain undisclosed, leaving the XRP community in suspense. Despite the uncertainty, pro-XRP legal expert Bill Morgan has provided some clarity, emphasizing that the status of XRP on secondary markets, such as its sale on U.S. cryptocurrency exchanges, is not being contested.
XRP Status on Secondary Markets Secured
Bill Morgan sheds light on the nuances of different sales types, particularly those deliberated in court. He points out the prevalent confusion surrounding secondary sales, explaining, “Some people mistakenly categorize Ripple’s programmatic sales to retail investors through exchanges as secondary sales.” Morgan emphasizes that the court’s decision did not address these secondary transactions. He clarifies, “Judge Torres did not rule on secondary sales occurring when individuals sell XRP on exchanges.” This type of transaction is not under the appeal’s purview. Morgan further elaborates that, according to a footnote in the summary judgment, the issue of secondary sales was not resolved and is, therefore, not subject to the appeal.
Focus of the SEC’s Appeal
According to Morgan, the SEC’s appeal is narrowly tailored. “The appeal is confined to programmatic sales or other Ripple sales and distributions,” he states, suggesting that the appeal might also touch upon legal aspects concerning penalties, injunctions, and disgorgements. In a recent exchange, Morgan recalled discussions with ex-SEC attorney Marc Fagel, where both concurred that the appeal is likely to focus on programmatic sales and distributions, though this is not certain.
Procedural Developments and Ripple’s Potential Response
Meanwhile, FOX Business journalist Eleanor Terrett highlighted the procedural steps of the appeal process. She noted that the SEC has yet to file its Form C with the Second Circuit, a document that will outline the specifics of their appeal, urging timely action so Ripple can formulate its response. Ripple faces a 14-day deadline to file a cross-appeal if it chooses to.
There is widespread anticipation within the legal arena that Ripple will indeed file a cross-appeal. Morgan remarked, “I find it difficult to believe Ripple will not file a cross-appeal.” Fred Rispoli, founder of HODL Law, echoed this sentiment, predicting an ongoing legal battle, “SEC appeals. Ripple will cross-appeal. SEC’s major district court cases against Coinbase and Kraken continue. Life goes on. Don’t panic.”
Strategic Moves by Ripple
In a recent post, Ripple’s Chief Legal Officer, Stuart Alderoty, hinted at the possibility of a cross-appeal, indicating that Ripple is actively strategizing in response to the SEC’s legal actions. This demonstrates Ripple’s ongoing commitment to defend its position within the cryptocurrency market.
