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SEC Plans to Appeal the SEC v Ripple Ruling Weighed
It was a quiet Saturday session, leaving investors to consider SEC plans to appeal the SEC v Ripple Court ruling.
An SEC appeal could take years, not months, and would leave the US digital asset space in limbo, with XRP at risk of fully reversing the Court ruling fueled gains.
Ripple CEO Brad Garlinghouse responded to the news of the SEC plans to appeal, saying,
“It’s absurd to blame a judge for faithfully applying the law. We all know legislation – not more regulation by enforcement – is the only way forward to provide clear rules and protect retail. Lad to see more members of Congress like Republicans Ritchie and Patrick McHenry champion this.”
Garlinghouse also said,
“An important topic has come up about protecting retail. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction. Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.”
Notably, an SEC appeal would also be at the expense of the US taxpayer, which should incentivize US lawmakers from both sides of the aisle to end the SEC rein of regulation by enforcement that failed to protect retail from the collapses of FTX and Terra Labs, among others.
Ripple Chief Legal Office Stuart Alderoty also shared his views on the SEC, saying,
“A securities agency only has jurisdiction over securities. No security, no role for the SEC. Pretending to have jurisdiction when there is none, is simply a political power play. It helps no one; it hurts everyone.”
Amicus Curiae attorney John E Deaton provided his views on the chances of a successful SEC appeal, saying,
“An appeal is not even close to being a setback. First, it will be two years from now before a decision is issued by the Second Circuit if it’s appealed. The Torres Decision is the law until then – at least in the Second Circuit. Second, even if the Second Circuit said Torres was wrong regarding her application of the third Howey factor (which I predict they won’t), that doesn’t mean the SEC wins on Programmatic Sales (sales on exchanges).”
Deaton went on to say,
“All that happens is that Torres then applies the other two factors and could likely still rule the SAME EXACT WAY, concluding the SEC didn’t satisfy the common enterprise factor – which is a more difficult factor to meet IMO than the third factor. Don’t let anyone underestimate how significant this win is for XRP and XRP Holders and Ripple.”
While the consensus is that Ripple will likely win on an appeal, investors dislike uncertainty. Until there is clarity on the SEC’s intentions, we expect XRP to remain under pressure.
The Day Ahead
SEC v Ripple Court ruling-related chatter remains the focal point, with an SEC file to appeal likely to weigh heavily on XRP.
However, beyond the SEC and Ripple, we expect US lawmaker chatter and Binance and Coinbase-related news to move the dial.
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