Ripple’s long-standing issue with the U.S. Securities and Exchange Commission (SEC) has now hit a proverbial crunch point, especially when it comes to appeals. Speaking on the XRP-SEC case, Stuart Alderoty, Ripple’s Chief Legal Officer, has weighed in, offering some information on what potential form this decision could take. Alderoty shared a post on “X” outlining two scenarios for the appeal from SEC, additionally reiterating that Ripple feels secure in its Fair Notice defence and says definite signs are there, revealing why they think XRP is non-security.
Two Possible Outcomes of the XRP-SEC Appeal
From what sources have gathered, Alderoty said the U.S. Court of Appeals for the Second Circuit essentially has two options: It can either uphold Judge Analisa Torres’ July ruling or expand it. He stated:
“The 2nd Circuit will either affirm Judge Torres or expand her ruling. The best the SEC can hope for (and it’s a remote hope) is a remand.”
A remand would return the case to the District Court for additional review, but Alderoty said that is hardly a given. He also mentioned that the SEC appeal was previously rejected in an interlocutory, which is when the agency tried to challenge a ruling regarding retail XRP sales passively.
Ripple’s Fair Notice Defense Remains Strong
At the heart of the XRP-SEC case has been its Fair Notice defence, which argues that the SEC did not provide clear guidance on whether or not XRP was a security. Alderoty harped on this note, that the defense was still preserved and if in fact the case was remanded back down to a lower court, every one of Ripple’s defenses including Fair Notice would be reconsidered.
“The SEC could end up arguing to Judge Torres that she wasn’t a person of ‘ordinary intelligence’ when she ruled against them. Awkward,” Alderoty quipped, alluding to the Fair Notice standard.
The argument is based on the notion that enforcement information available to anyone possessing “ordinary intelligence” must not have been clear, and such claims brought by regulators like the SEC against Ripple were unfair. The risks are not insubstantial, but Aldeoty’s belief in this defence illustrates Ripple is prepared to persistently challenge the SEC.
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Ripple’s Confidence in XRP’s Non-Security Status
Ripple, despite the request, has however continued to be steadfast on its claim that it is not a security. In a ruling in July, Judge Torres declared that XRP sales to retail did not amount as securities transactions —an important victory for Ripple. While the SEC is moving to reverse other parts of the case, Ripple also recently filed a cross-appeal to combat that contention.
Alderoty further informed that despite the ongoing legal tussle, non-security status of XRP in retail sales is still valid. Thus, at least for now, XRP is seemingly “in the clear” with statements relating to retail transactions made by the SEC staff.
The XRP-SEC case has transformed into a flagship in the ever-changing landscape of cryptocurrency compliance. The decision from the appeal is going to affect everything, not just XRP but for crypto in general. Should Ripple win the case, it can establish a valuable precedent whereby certain cryptocurrencies should only be regarded as securities up to a specific point.
The fact that Stuart Alderoty tends to agree shows Ripple is sticking with its legal strategy and has confidence that the SEC does not have a strong case as they would like everyone to believe. Armed with a non-security status for XRP, and now solid defenses by Ripple themselves; the company is set to go at it in battling against SEC — all eyes from the wider crypto industry on them.
This legal saga is fast becoming a morality play, Alderoty said. It is still unclear as to whether the SEC will end up winning an appeal, but Ripple looks well primed for such a situation.
Conclusion: The Next Chapter of Ripple
With regards to the Ripple lawsuit with the SEC, everyone is watching for results from an appeal effort. This means that, with two different outcomes in play, the company is ready for whatever fight it faces against the SEC. With the fight for a clear path still underway, Ripple’s stance and confidence over XRP not being unregistered security indicates that neither party is going down without a fight. The results of this lawsuit tussle will certainly help determine the U.S. regulatory attitude to digital assets for years to come.
As this fascinating news develops, TheBITJournal will keep covering it. Stay tuned, stay updated!
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