In the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), the crypto community has eagerly anticipated the SEC’s next move.
A pro-crypto lawyer, James Murphy, has outlined four potential options the SEC may consider in response to Ripple’s partial legal victory.
Will The SEC File For Interlocutory Appeal Against Ripple?
The first option involves the SEC filing a request for interlocutory appeal. Since no final judgment has been entered yet, the SEC does not have the unilateral right to appeal. Instead, it would need permission from both Judge Torres and the 2nd Circuit Court of Appeals to proceed with an interlocutory appeal.
To obtain permission, the SEC must show that the ruling involves a controlling question of law, that there are substantial grounds for a difference of opinion, and that an immediate appeal may materially advance the litigation.
According to Murphy, the second option involves the SEC going through with a trial on the aiding and abetting claim against Larsen and Brad Garlinghouse, Ripple’s CEO, and then filing a regular appeal.
The third option is for the SEC to drop the claim against Larsen and Garlinghouse now and take an immediate appeal, for which no permission would be needed. The final option is for the SEC to settle with Ripple.
However, Murphy believes that the SEC will likely pursue the first option of filing a request for interlocutory appeal.
In that scenario, obtaining permission for an interlocutory appeal can be time-consuming and potentially delay the overall timeline of the case. However, it is essential to note that the timeline can vary depending on the specific circumstances of the case and the court’s availability to consider the request.
On the other hand, Murphy cites the tremendous political pressure on SEC Chair Gary Gensler to get Judge Torres’ decision reversed as soon as possible, as well as the decision’s impact on the SEC’s cases against other crypto exchanges such as Coinbase, Binance, and Bittrex.
The political considerations are essential as crypto exchanges around the world relist XRP, making the SEC look bad and emboldening progressive Congressman Ritchie Torres and others to ramp up criticism of Gensler.
Murphy thinks a settlement is unlikely since it is hard to imagine the SEC settling with Ripple and leaving Judge Torres’ precedent untested on appeal.
The SEC’s “regulation-by-enforcement” program against the crypto industry hinges on reversing Torres. Therefore, he expects the SEC to request an interlocutory appeal within the next two weeks.
Ultimately, Murphy believes that it would be in the best interests of Ripple and the XRP community for the appeals process to start now rather than a year from now. He also likes Ripple’s chances on appeal.
As the legal battle between Ripple and the SEC continues, the crypto community will eagerly watch how events unfold and the next move.
Featured image from Unsplash, chart from TradingView.com