SEC Unlikely to Appeal in Ripple Case Amid Legal Clarity Concerns

A former federal prosecutor who is now the CEO of a crypto-focused venture capital fund says she would be “surprised” if the U.S. securities regulator immediately filed an appeal against the Ripple case ruling, as the ruling presently benefits from a lack of “legal clarity.”

The status of XRP as a security was partially ruled in favor of Ripple Labs by Judge Analisa Torres on July 13. Several commentators warned at the time that an SEC appeal was a possibility.

Katie Haun, CEO of Haun Ventures, explained on Twitter on July 15 that the securities regulator will likely remain silent as it benefits from the “current confusion” and that losing an appeal could imperil its future enforcement actions.

“Anything is possible, but an immediate appeal seems unlikely, both because the agency would have to ask the court to split this decision from the portion going to trial and because I’m skeptical that the SEC wants legal clarity,” Haun said.

“The Commission benefits from the current confusion and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”

The CEO of Ripple Labs, Brad Garlinghouse, believes it could “take years” before the SEC files an appeal on July 15. He added that an appeal by the SEC would only serve to bolster Judge Torres’ ruling that XRP is not a security.

In a YouTube video posted on the same day, U.S. attorney and Ripple commentator Jeremy Hogan expressed his belief that the SEC will file an appeal after the trial between the SEC and Ripple concludes in early 2024.

Currently, the SEC is pursuing Binance and Coinbase for alleged violations of securities laws. Even though the recent ruling in the Ripple case is not a binding precedent, some believe it could affect the outcome of the cases.

In light of the recent ruling, several crypto commentators and legislators have urged Congress to act and provide crypto with legal clarity.

Brian Quintenz, a former Commodity Futures Trading Commission commissioner who is now the head of policy for the crypto venture capital firm a16z, stated that the recent Ripple court decision “only results in more uncertainty for entrepreneurs and builders.”

The ruling, according to U.S. Senator Cynthia Lummis, highlights the imperative need for Congress to establish a clear and thorough regulatory framework for the cryptocurrency industry.