Bitrabo Editorial
Based on statements by Dennis Kelleher, the CEO of Better Markets, there’s insight into the potential winner in a hypothetical appeal between Ripple and the US Securities and Exchange Commission (SEC). Despite both parties not presently considering an appeal, it remains a likelihood.
Predictions Favor the SEC’s Chances
In a recent post on X (formerly Twitter), Kelleher indicated that the SEC has a favorable 90% probability of winning an appeal in the ongoing legal dispute with Ripple. He critiqued Judge Analisa Torres’ ruling from last year, suggesting a misinterpretation of the law regarding the protection of institutional versus retail investors under securities laws.
Referring specifically to Torres’ judgment that considered Ripple’s institutional XRP sales as investment contracts while excluding programmatic sales, this stands as a pivotal point for a potential SEC appeal, as it contradicts the Commission’s stance on XRP classification.
On the other side, Ripple’s Chief Legal Officer, Stuart Alderoty, remains confident in the company’s stance if faced with an appeal from the SEC. Alderoty believes the SEC stands a mere 10% chance of success in an appeal. Ripple has indicated its willingness to pay the $125 million penalty imposed by Judge Torres for violating securities laws.
Alderoty discouraged the SEC from pursuing an appeal, emphasizing that Ripple is inclined to abide by the court’s decisions and focus on their operational continuity.
Addressing Misconceptions on Judicial Stance
Contrary to claims asserting rejections of Judge Torres’ rulings by other judges, the stance was echoed by Judge Amy Berman Jackson in a case involving Binance US and the SEC. Jackson upheld Torres’ approach, dismissing the SEC’s argument on Binance Coin secondary sales and crypto as securities.
Both judges referenced the Howey Test to clarify that cryptocurrency tokens’ classification as securities centered on the manner of their distribution. Torres’ categorization of Ripple’s XRP sales to institutional investors as investment contracts was tied to their expected gains, distinct from retail investors’ secondary purchases.
Cover image credits: Dall-E, chart credits: Tradingview