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On Wednesday, October 2, the United States Securities and Exchange Commission (SEC) took a formal step in extending the XRP lawsuit with Ripple by filing a Notice of Appeal of Judge Torres’s ruling. This move came on the heels of the final judgment by the US District Court, Southern District of New York on August 7, which the SEC is now contesting.
In the notice, the agency does not specify which elements of the case it will appeal. The ambiguity leaves room for speculation whether the SEC will challenge both decisions by Judge Torres, the ruling on programmatic sales of XRP which also clarified that XRP itself is not a security (from July 2023) or the remedies imposed on Ripple’s institutional sales, finalized on August 7.
Ripple’s response to the SEC’s action was promptly articulated by the company’s Chief Legal Officer, Stuart Alderoty. Through a post on X, Alderoty slams the SEC’s persistent legal strategies. Notably, he also mentions that Ripple is contemplating a cross-appeal. If Ripple decides to pursue a cross-appeal, it must file within a 14-day window that begins on October 3.
(1) The SEC’s decision to appeal is disappointing, but not surprising. This just prolongs what’s already a complete embarrassment for the agency. The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course,… https://t.co/PQozMMtthf
— Stuart Alderoty (@s_alderoty) October 2, 2024
XRP Lawsuit Not Over Before 2026?
Via X, crypto lawyer James “MetaLawMan” Murphy commented on the potential next deadline in the case: “Next step on the Ripple Appeal. My recollection of the process is that the SEC has 14 days to file a form that will identify which specific issues it is appealing. Lawyer disclaimer: I haven’t handled a 2nd Circuit appeal since 2021. So, things could have changed.”
Fred Rispoli, a pro-XRP lawyer and founder of HODL Law, shared a comprehensive projection of how the appellate timeline might unfold. He indicated that the SEC would likely have its brief due by December 2, 2024, with a probable request for a 30-day extension pushing this deadline to early January 2025.
Concurrently, Ripple would be preparing its opening brief for a potential cross-appeal around the same time. Following this, the opposition’s briefs would be due by February 2, 2025, with Ripple potentially utilizing its right to an extension, which would shift this deadline to March 2, 2025.
The subsequent reply briefs would be scheduled for the end of March 2025. Oral arguments would be anticipated between September and October 2025, with a final ruling from the Second Circuit expected no earlier than January 2026, although it might realistically extend to March or April 2026.
Following the news of the appeal, the spirit in the XRP community has been heated. Chad Steingraber raised a question about the timeline for the case reaching the Supreme Court, to which Rispoli estimated an additional 1.5 to 2 years from the conclusion of the Second Circuit’s decision.
Other community members speculated about potential political influences on the case, pondering scenarios where changes in the US administration could alter the SEC’s stance or even lead to a withdrawal of the appeal. In response to a query about why the SEC might withdraw their appeal, Rispoli stated “The parties could agree to withdraw the appeal at any time.”
He added, “There is a mandatory mediation program in the appellate courts that encourages all parties to settle as early as possible. This is an extreme example, but if the Democrats were demolished in the election and 20% of voters in the exit polls said it was because of the Ripple case, that would be a reason for the SEC to fold real quick.”
At press time, XRP traded at $0.5332 down -10% in the last 24 hours.
Featured image created with DALL.E, chart from TradingView.com
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