XRP Lawsuit Update: Ripple and SEC’s Next Moves
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Ripple CEO Indicates SEC Withdrawal from Appeal
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In a significant development, Ripple CEO Brad Garlinghouse announced that the U.S. Securities and Exchange Commission (SEC) has decided to withdraw its appeal in the ongoing XRP lawsuit. Despite this progress, the final resolution of the case remains elusive, as Ripple must now decide whether to proceed with its own appeal or not.
Exploring the Future of the XRP Lawsuit
Legal expert Jeremy Hogan took to social media to discuss the implications of the SEC’s decision, stating, “While the SEC has retracted its appeal, it’s uncertain whether Ripple has reciprocated.” Judge Analisa Torres’s ruling currently poses the maximum challenge for Ripple, imposing a $125 million penalty along with an injunction. Without further action from Ripple, this judgment stands as the current outcome.
Potential Paths Forward for Ripple
Hogan outlined several possible scenarios for Ripple’s next steps:
- Continue with the Appeal: Ripple may opt to proceed with its appeal, seeking a decision from an appellate court regarding the necessity of formal contracts for “investment contracts.”
- Withdraw the Appeal: By dropping its appeal, Ripple would return to the trial court, where both parties could negotiate modifications to the judgment.
- Private Settlement: Another option is for Ripple to withdraw its appeal and reach a private settlement with the SEC, without altering the existing judgment.
- Pay the Fine: Ripple could choose to pay the $125 million penalty and close this chapter.
Summarizing the situation, Hogan remarked, “There are four scenarios remaining… That’s the situation in a nutshell.”
Leverage and Strategy in Ripple’s Decision
Fred Rispoli, another attorney supporting XRP, expressed surprise that the SEC did not condition its appeal withdrawal on Ripple doing the same. Rispoli suggested that an agreement might already exist for Ripple to withdraw its appeal in exchange for a substantially reduced fine. He noted, “Without the SEC’s appeal, Ripple holds a strong position.”
Rispoli identified three main reasons why continuing the appeal might be unnecessary: the risk of an unfavorable ruling from the U.S. Court of Appeals for the Second Circuit, the potential for new federal legislation that could alter the legal environment, and Ripple’s claim that it no longer engages in the disputed activities. Additionally, he highlighted the strategic advantage of holding onto the appeal for negotiation purposes, asserting, “Keeping the appeal is a bargaining chip that could justify reducing the $125 million penalty.”
As the SEC steps back from its appeal, attention now turns to Ripple’s legal team and executives for their next move.
At the time of this writing, XRP is trading at $2.49.
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