In early October, a federal judge essentially slammed the door on the U.S. Securities and Exchange Commission’s hopes to appeal her recent verdict in the Ripple Labs case. This judgment is widely regarded as a significant setback for the regulatory body’s mission to keep a tight leash on the cryptocurrency markets.
On July 13, U.S. District Judge Analisa Torres, presiding in Manhattan, delivered a verdict that sent shockwaves through the crypto world. She decreed that Ripple’s sale of XRP digital tokens on public exchanges adhered to federal securities laws. Her reasoning was straightforward: purchasers of XRP had no logical grounds to expect profits stemming from Ripple’s efforts.
The SEC was itching to appeal Judge Torres’ conclusions regarding the “programmatic” sales of XRP and using XRP as payment for services. They argued that an appeal would have a far-reaching impact on numerous other lawsuits in the pipeline.
However, the judge wasn’t buying it. She couldn’t see any significant reason for a difference in opinion about her findings, and she didn’t believe that an appeal would push the case any closer to an amicable solution. Simply put, she told the SEC, “Thanks, but no thanks.”
As a result, the SEC decided to throw in the towel in its ongoing legal tussle with Ripple, giving up on the claims that Ripple’s CEO Brad Garlinghouse and Executive Chairman Chris Larsen were partners in crime, aiding and abetting the company in its alleged federal securities law violations during XRP transactions. This surprising turn of events led to the cancellation of the trial, originally slated for next year. While it’s undoubtedly another feather in Ripple’s cap, it also inches the SEC closer to the brink of appealing a federal judge’s decision in these seemingly never-ending legal battles.
“Chris and I have endured nearly three years of groundless accusations from a maverick regulator with a clear political agenda,” stated Garlinghouse. “Instead of focusing their efforts on tracking down the actual wrongdoers who were pilfering customer funds on overseas exchanges and currying political favour, the SEC chose to target the ones trying to do right.”
In July, Ripple secured a significant – although partial – triumph in the courtroom. The judge presiding over the case concluded that the company hadn’t breached federal securities laws when it made XRP accessible to retail investors through exchanges. At the same time, Judge Analisa Torres also ruled that the company had indeed run afoul of federal securities law by directly selling XRP to institutional investors.
According to the filing, the SEC and Ripple plan to engage in discussions to determine a potential schedule for presenting arguments on the case’s pending issues. This issue concerns the appropriate remedies for Ripple’s Section 5 violations related to its Institutional Sales of XRP.
However, a spokesperson from the SEC remained silent on the matter. Meanwhile, Ripple, in a press release, characterised the recent filing as a “surrender” and the initial pursuit as “absurd theatrics.”
The news of these developments caused a notable 4.1% surge in the price of XRP. It’s worth noting that in early October, the SEC’s attempt to appeal its courtroom defeat in the Ripple case while other issues were still proceeding through the trial process was flatly denied.
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