The U.S. Securities and Exchange Commission (SEC) finds itself at a crossroads following Judge Analisa Torres’ recent ruling, which classified XRP as a digital asset. This decision presents a significant dilemma for the SEC, prompting questions about their next course of action in the case.
Legal Expert Explained Possible Paths Forward
The SEC has at least four options to consider as they navigate the aftermath of the ruling. The most likely option, according to cryptocurrency lawyer James A. Murphy, is for the SEC to file a provisional appeal. This would entail seeking permission from both Judge Torres and the 2nd Circuit Court of Appeals to appeal the decision before the case reaches its conclusion.
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In order for the SEC to be granted permission for the appeal, they must demonstrate that the ruling raises a major legal issue, showcases significant differences of opinion, and an immediate appeal can considerably advance the case.
Murphy believes that the SEC is likely to pursue this avenue, driven by the mounting political pressure on SEC Chairman Gary Gensler to reverse the Torres decision. Furthermore, the SEC’s wider “regulation by sanction” program targeting the crypto industry heavily relies on overturning Torres’ ruling.
Another option on the table is for the securities regulator to carry on with the aid and abetting suit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.
Alternatively, the SEC could drop the claim against Larsen and Garlinghouse and proceed with an immediate appeal that does not require permission. Lastly, the possibility of a settlement remains an option, though Murphy considers it unlikely given the implications of leaving the Torres precedent untested.
SEC v. @Ripple update.
There's a lot of debate about what the SEC will do next in the Ripple case.
I believe there are at least 4 options under consideration…
— MetaLawMan (@MetaLawMan) July 25, 2023
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Speculating the Future
The coming weeks will prove crucial in shaping the future of the SEC v. Ripple case. Eyes are now on the SEC to see how they respond to Judge Torres’ ruling.
The agency’s choice, whether to file a provisional appeal, proceed with other legal avenues, or consider a settlement, will significantly impact the outcome of this high-stakes legal battle.
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