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Ripple XRP Case: As final judgment on $2 billion in fines looms, popular lawyers including former SEC lawyers weighs on odds of settlement, potential final date, and appeal by the SEC. By Varinder Singh 8 hours ago Updated 6 hours ago
Highlights
- Crypto community awaits court’s final judgment in US SEC v. Ripple Labs lawsuit.
- Lawyers believe a settlement between the SEC and Ripple can still happen before final judgment.
- SEC may not file an appeal to not risk elevating it to circuit court level.
- Judge Torres may bypass a ruling by Judge Netburn on the expert witness.
- The final judgment on remedies is expected in August or September.
Ripple XRP Case: The legal tussle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is one of the major lawsuits that can not only put crypto at the forefront, but is equally relevant for crypto regulatory clarity. The SEC has faced defeats recently including drop of civil charges against Ripple executives Christian Larsen and Brad Garlinghouse.
Ripple CEO Garlinghouse revealed the company has spent over $200 million in its fight against the SEC’s overreach. XRP holders now await the judge’s decision on motions for final judgment in the remedies phase.
Lawyers’ Views on Settlement, Appeal, Final Ruling Timeline, More
As the crypto community awaits final judgment on $2 billion in penalties, popular lawyers including former SEC lawyers have looked at potential outcomes next in the US SEC v. Ripple Labs lawsuit.
Potential Settlement
Lawyers including former SEC lawyers Marc Fagel and James Farrell believe a settlement between the SEC and Ripple can still happen. Jeremy Hogan, partner at law firm Hogan & Hogan, said the lawsuit can still be settled, but it’s unlikely as Ripple has the upper hand in the lawsuit after recent wins.
Yes, it could still be settled before the final judgment but very unlikely.
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— Jeremy Hogan (@attorneyjeremy1) June 26, 2024
The SEC seeks to reveal sealed filings arguing it is crucial for ruling on Ripple’s current assets (relevant to penalty amount), amount of recent sales (injunctive relief and penalties), revenues & expenses (disgorgement), and the size of discounts to some institutional investors (investor harm). Ripple Labs has objected to the SEC’s stance stating that historical contracts are still relevant to the firm.
Appeal Against Judge Torres’ Summary Judgment
The odds of SEC appealing Judge Torres’ summary judgment that XRP in itself is not a security under the Howey Test are low. Comments by former SEC Crypto Enforcement Chief Kristina Littman made a buzz in the community as she thinks the SEC may not appeal against Judge Torres’ decision on XRP. “The SEC might just let the Ripple opinion stay there as a District Court opinion and not risk elevating it to Circuit level.”
The Second Circuit Court earlier ruled in favor of Coinbase that secondary sales of crypto are not securities, adding weight to Judge Torres’ ruling on XRP programmatic sales. Coinbase CLO Paul Grewal took to X to reveal the major win for the crypto industry.
Lawyer James Murphy, known as MetaLawMan, also believes the tokens identified in the Coinbase lawsuit do not qualify as securities.
Empower Oversight president Tristan Leavitt also said many ‘no relevant records’ responses from the SEC look awfully fishy. The new FOIA request to further press the SEC for more records.
Final Ruling Date
Lawyers including Fred Rispoli said “Netburn and Torres can confer and determine that the issue before Netburn (the SEC’s “extra expert”) does not need to be ruled upon.” If the ruling is in Ripple’s favor, Judge Torres can bypass the expert witness to announce a final judgment on remedies and injunction.
Lawyers claimed that the final ruling to come substantially quicker than the summary judgment, likely within 60 to 90 days after the last brief. With the latest developments including delays due to the election year, the XRP community has to wait until August or September for Judge Torres’ final ruling.
The U.S. SEC and Ripple can also settle arguments not addressed by judges in the ruling.