The U.S. Securities and Exchange Commission (SEC) is unlikely to attempt to appeal the results of its lawsuit against payments firm Ripple, according to closely followed attorney Jeremy Hogan.
The SEC sued Ripple in late 2020 for allegedly selling XRP as an unregistered security, and last week, Judge Analisa Torres ruled Ripple’s automated, open market sales of XRP are not securities transactions.
However, the judge sided with the SEC in its assertion that Ripple’s direct sales of XRP to institutional participants did represent a securities offering.
Hogan, who has followed the lawsuit closely since the beginning, says that neither the SEC or Ripple are likely to appeal the judge’s decision.
“Most appeals happen after the case is completely finished, which the Ripple case isn’t.
After the ‘final’ judgment is entered, either party has 60 days to appeal.
We don’t have a final judgment yet so an appeal of Judge Torres’ Order would be an ‘interlocutory appeal.’”
The lawyer says that if the judge believed that the ruling was controversial enough that it needed immediate review, she likely would have certified it to be reviewed by the appeals court. Since she didn’t Hogan says she also probably wouldn’t grant an appeal to either party.
Contrary to many other legal experts following the case, the attorney predicts that neither party appeals, and that Ripple will likely end up paying the SEC a fine for its direct sales of XRP to institutional clients.
“So, will either party appeal and why/why not? Most attorneys I’ve seen think the SEC will appeal. If I had to guess (which is what we are doing really) I would bet NEITHER side appeals. First, appeals are difficult to win as it’s Judge Torres who reviewed the WHOLE record.
Second, the SEC has more to lose than gain by appealing. If it wins the appeal, it pulls back some adverse trial-level case. But if it LOSES at the appellate level, now every Court in the 2nd DCA (district court of appeals) MUST follow the decision. They could literally turn a mole-hill into a mountain.
Ripple probably won’t appeal IF it can pay the fine and IF the ODL (on-demand liquidity) part of the ruling doesn’t mess up its business. Which factors all point towards ‘no appeal’ for me.”
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