In a significant development in the ongoing legal saga between Ripple Labs and the United States Securities and Exchange Commission (SEC), both parties have signaled their readiness to proceed with an appeal in the second quarter of 2024.
Ripple, a blockchain technology company known for its cryptocurrency XRP, has presented a flexible calendar to the US federal court, indicating its willingness to engage in proceedings at any time during the specified period. Conversely, the SEC has outlined certain constraints on its availability, potentially leading to a drawn-out legal process.
Steps Toward an SEC v Ripple Appeal Date
In separate correspondence addressed to Judge Torres of the US District Court for the Southern District of New York, both Ripple and the SEC have expressed their intentions to move forward with the appeal process in Q2 2024.
This recent development follows a series of legal maneuvers. On August 17, the court granted the SEC’s request to file an interlocutory appeal in the case against Ripple. This decision came on the heels of a partial victory for both parties in a July 13 ruling. The court’s decision categorized XRP, Ripple’s native token, as a security for institutional sales while exempting individual investors from this classification. The SEC, however, aims to challenge this ruling and assert that XRP should be classified as a security for all transactions.
Conflicting Schedules and Legal Strategy
Ripple’s confidence in its appeal is evident in its communication with the court. The company informed Judge Torres that it has no scheduling conflicts throughout the second quarter of 2024 and is fully prepared for trial during that period. This assurance is part of Ripple’s strategy to assert that XRP does not fall under the category of a security.
CEO of Ripple, Brad Garlinghouse, has voiced optimism that an appeal would strengthen the argument that XRP is not a security, emphasizing the positive impact of regulatory clarity on the cryptocurrency industry.
On the other hand, the SEC has outlined a more restricted availability schedule. It has identified 19 blackout days, constituting about 21% of the quarter, during which it would be unavailable for trial. These restrictions were specified as April 15 to April 19, May 1 to May 7, and May 27 to May 31.
Significance and Future Implications
The legal battle between Ripple and the SEC has been ongoing since December 2020. The recent ruling, which excluded XRP from being classified as a security on public exchanges, was seen as a positive development within the cryptocurrency sector. However, the SEC swiftly announced its intention to challenge this decision through an appeal.
Furthermore, the SEC indicated that the implications of the decision could extend to its ongoing legal actions against major cryptocurrency exchanges, Binance and Coinbase. The lawsuits against these exchanges are built on similar allegations of security violations, thus making the outcome of the Ripple case crucial for the broader regulatory landscape of the cryptocurrency market.
Notably, Ripple’s CEO Brad Garlinghouse revealed that the company has expended approximately $200 million on legal expenses in its battle against the SEC, underscoring the significance of the case for both parties involved and the wider cryptocurrency industry.