A leading legal expert has shared insights into the Securities and Exchange Commission’s (SEC) anticipated appeal in the ongoing Ripple case.
Attorney Fred Rispoli has outlined the key areas the SEC is expected to challenge, primarily focusing on the court’s decisions concerning programmatic sales and other distributions of Ripple’s native token, XRP.
SEC to Appeal Disgorgement Decision
Rispoli notes that the SEC will likely dispute Judge Analisa Torres’ ruling on the disgorgement of profits.
Initially, the SEC had sought a staggering $2 billion in penalties from Ripple. However, the judge significantly reduced this amount to $125 million.
The SEC is expected to argue that this penalty is insufficient given the scale of the violations it has accused Ripple of committing.
Ripple’s Chief Legal Officer, Stuart Alderoty, has expressed confidence that Ripple will prevail in this next stage of the legal battle.
Alderoty made it clear that Ripple is prepared for the SEC’s appeal, stating that he looks forward to the federal court of appeals finally ending Gensler’s misguided attempt to target the crypto industry.
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Focus on Penalty and Programmatic Sales
Rispoli suggests that the SEC will challenge not only the amount of the penalty but also the court’s conclusions on Ripple’s programmatic sales of XRP and other distributions.
The agency’s Form C, due to be filed by Thursday, is expected to provide initial details on the focus of its appeal.
In the subsequent opening brief, the SEC will present more comprehensive arguments to back its challenge of the court’s decisions.
Although Ripple’s executives have previously asserted that the legal status of XRP is settled and will remain unchanged by the appeal, Rispoli believes the SEC might attempt to revisit this issue.
While he is confident the SEC will not succeed in overturning the decision that XRP is not a security, he cautions that the agency may include arguments on this matter in its appellate brief.
Ripple’s legal team has consistently maintained that XRP’s status is not at risk in the appeal, echoing the sentiment of the initial court ruling that found XRP to be a digital asset rather than a security.
This ruling has provided Ripple with significant relief as it aims to move forward with its operations, even as the broader crypto industry faces ongoing regulatory scrutiny.
As the SEC continues its aggressive pursuit of regulatory oversight in the cryptocurrency space, this case remains a critical precedent for the industry at large.
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