In a recent development in the legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, a crypto legal expert has criticized the SEC’s decision to appeal a ruling in the lawsuit involving the sale of the crypto asset XRP.
The SEC initially filed a lawsuit against Ripple Labs in December 2020, alleging that the company had been selling XRP as an unregistered security. However, in October 2023, a judge ruled that only institutional sales of XRP qualify as sales of securities, while retail sales were deemed to be in compliance with regulations.
Despite this ruling, the SEC announced last week that it would appeal the decision, a move that has been met with criticism from Ripple’s chief legal counsel, Stuart Alderoty. Alderoty believes that the SEC is prolonging its war on the crypto asset industry by appealing the decision.
Attorney Jeremy Hogan took to social media to express his views on the SEC’s decision to appeal, labeling it as a major mistake from a risk-reward perspective. Hogan pointed out that if the SEC were to win the appeal, it would only result in more financial penalties for Ripple without actually protecting anyone.
Hogan also highlighted the potential implications of Ripple raising its ‘Blue Sky’ law issue during the appeal process. Blue Sky laws are designed to safeguard the public against fraudulent securities sales by requiring firms to register their offerings, unless exemptions apply.
According to Hogan, the odds are stacked against the SEC in this appeal, both statistically and based on the judge’s detailed opinion in the case. Even if the SEC were to emerge victorious in the appeal, Hogan believes that it would likely only result in monetary penalties, with no significant changes to XRP’s status or its use by Ripple.
The ongoing legal battle between the SEC and Ripple Labs has been closely watched by the crypto community, with many stakeholders eagerly awaiting the outcome of the appeal. The decision to appeal the ruling has sparked debate among legal experts and industry insiders, with opinions divided on the potential implications for the broader crypto space.
As the legal saga continues to unfold, stakeholders in the crypto industry will be closely monitoring the proceedings to see how the case ultimately impacts the regulatory landscape for digital assets. Stay tuned for further updates on this developing story.