FOX Journalist Analyzes Regulatory Implications as Deadline for SEC Appeal in the Ripple Case Looms

The deadline for the US Securities and Exchange Commission (SEC) to appeal the ruling in its case against Ripple is set for October 7.

With the deadline drawing closer, FOX Business journalist Eleanor Terrett has analyzed the case’s pros and cons and stated the likely implications if the SEC fails to appeal.

In a post on Tuesday, Terrett cited sources alleging that the likelihood of an appeal is high, considering the effect the outcome of the case would have on crypto regulation in the United States.

For context, Judge Analisa Torres handed Ripple a partial victory over the SEC after ruling that the sales of XRP to secondary users do not constitute an investment contract. Meanwhile, for Ripple’s violation, the judge ordered the firm to pay a $125 million fine instead of the $2 billion intended by the plaintiff.

SEC Likely to Appeal

Per the Tuesday post, Terrett cited a disclosure from former SEC lawyer Marc Powers that the securities watchdog would likely appeal the August 7 ruling. Powers noted that the SEC will appeal the case considering its implications on crypto regulation in the US.

The former SEC lawyer stated that the agency and its crypto-skeptic boss, Gary Gensler, would look to avert the two-edged regulation that Judge Torres’ ruling will bring to the sector. He also noted that the SEC would not want the programmatic sales ruling to stand.

Notably, an SEC attorney shared the same view with the Powers. In a court session in January, the legal representative stated that they disagreed with Judge Torres’ segregation of primary and secondary investors. According to the lawyer, whether it is sold to institutions or retailers, it is the same XRP.

It bears mentioning that the SEC tried to appeal the programmatic sales ruling immediately, but the court denied the motion. Judge Torres stated that the securities regulator could only contend the verdict after the final declaration. 

Case Outcome to Likely Influence Other Lawsuit

Terrett noted that the ruling’s outcome would likely influence other SEC legal battles. Proceedings on the SEC’s lawsuit against Binance, Coinbase, and Kraken for offering unregistered securities are still ongoing, and the exchanges are closely monitoring the Ripple vs. SEC case.

Should the SEC not appeal the Ripple case, these exchanges could cite the ruling in their legal dealings with the regulator. Notably, Terraform already tried the approach but failed to make headway.

Appeal, A Waste of Resources

Meanwhile, Jeremy Hogan, a partner at Hogan and Hogan, feels the SEC appeal would be a waste of resources. He stated that the agency should not focus on winning on a single asset in a broad sector.

Hogan stated that the best way to dissolve the programmatic sales ruling was to stick it to Coinbase and Binance. He noted that the case against the two exchanges better addressed the issue of secondary sales and is “more relevant to the current enforcement priorities.”

Notably, despite heightened suggestions that the SEC will appeal the case, Ripple’s Chief Legal Officer Stuart Alderoty maintains that the case is over. He further stated that the slim chances of victory in the Appeals Court meant the US top regulator would not successfully overturn the ruling.