Ripple CEO and Crypto Community Speculate on SEC Appeal Amid Legal Confusion

Updated: 18 July 2023

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In late 2020, the US SEC filed a lawsuit against Ripple Labs, claiming it conducted an unregistered securities offering.

After a two-and-a-half-year-long legal battle, the US authorities finally made a decision regarding the case, and Ripple won a partial victory over the regulator.

According to the ex-federal prosecutor, Katie Haun, the SEC is likely to file an immediate appeal, which she found quite surprising.

Some non-legal advice musings on the Ripple decision, including two main takeaways:

1/ The Court drew a reasonable line and overall it's a good outcome for the industry. For other suits w/ the SEC, we believe the Supreme Court’s “major questions doctrine” will play a larger…

— Kathryn Haun (@katie_haun) July 15, 2023

It doesn’t make sense for the SEC to file an appeal so soon

Katie Haun, a former federal prosecutor, is now the CEO of Haun Ventures — a crypto-oriented venture capital fund. Familiar with both sides of the crypto debate, Haun found claims that the SEC reportedly seeks to file an appeal regarding the Ripple case ruling surprising.

She stated that the regulator’s behavior indicates that it wishes to maintain the confusion regarding the crypto sector.

The lack of regulation works in the SEC’s favor, as it allows it to sue and charge companies and individuals as it pleases.

However, if the regulator files and loses the appeal, it would put all of its future enforcement actions at risk.

This is one of the main reasons why she found it surprising that others expect the regulator to try to restart the case so soon after losing it.

The SEC will spend years preparing the appeal, says Ripple CEO

The ruling itself came less than a week ago when Judge Analisa Torres granted a partial summary judgment in favor of Ripple on July 13th.

After reviewing all aspects of the case, the Judge found that XRP is not a security, contrary to the SEC’s claims.

Many are speculating that the SEC is planning to launch an immediate appeal, but Haun expressed her skepticism, as the regulator would suffer even more damage if it loses the same case twice.

She argued that the lack of regulations benefits the regulator, and Brad Garlinghouse, the CEO of Ripple Labs, openly supported her view on the matter.

According to him, it will likely take several years before the regulator decides to lodge an appeal.

Garlinghouse also noted that an appeal would only reinforce Judge Torres’ decision that XRP is not a security.

On the other hand, a US lawyer and Ripple commentator, Jeremy Hogan, believes that the SEC might launch its appeal in early 2024.

The Ripple case could influence the SEC’s legal battles with Coinbase and Binance

At the moment, the regulator is locked in two major legal battles against two crypto exchange giants, Coinbase and Binance.

The securities watchdog accused both platforms of violating the law by selling unregistered securities. While both platforms seemingly intend to fight the regulator instead of just accepting the blame and paying fines, the recent Ripple victory could contribute to their cases.

Until now, no one has been able to challenge the SEC and defeat the regulator’s lawsuits. With Ripple proving that the SEC was wrong about XRP, this could bring all past and future lawsuits into question.

Hoping yesterday’s decision is the wake-up call that Congress needs. This ruling directly undercuts the SEC’s claims that nearly all tokens are inherently securities – likely to set a positive precedent for other digital tokens in the US. https://t.co/ZlSXbTigxK

— Brad Garlinghouse (@bgarlinghouse) July 15, 2023

More than that, crypto commentators and lawmakers are putting tremendous pressure on the US Congress to provide legal clarity for digital assets — something the US government has been trying to avoid for years.

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