As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed numerous legal battles between regulatory bodies and tech companies. The ongoing saga between Ripple and the SEC is no exception, and it seems to be reminiscent of the epic tale of Captain Ahab and Moby Dick.
TL;DR
- The SEC continued the legal battle with Ripple by filing an official appeal on a specific summary judgment.
- The company’s CLO likened the regulator’s desire to prevail in the case to the tragic end of Captain Ahab from the novel Moby Dick.
What Does the SEC Hope for?
The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) shows no signs of resolution after the SEC’s recent action. In case you missed it, the agency has officially appealed a 2023 ruling by Judge Analisa Torres, which found that Ripple’s sales of XRP to retail investors on cryptocurrency exchanges did not breach U.S. securities regulations.
This implies that the situation will progress to a fresh stage involving submissions and the documentation process, potentially pushing its conclusion back for several more years.
Multiple industry figures shared their opinions on the potential outcomes following the appeal. Among them is Ripple’s top legal officer, Stuart Alderoty. He predicted that the Second Circuit Court of Appeals could either uphold Judge Torres’ ruling or broaden its scope.
“The best the SEC can hope for (and it’s a remote hope) is a remand,” Alderoty added.
In simpler terms, the original text explains that the executive had previously detailed an attempt by the SEC to file an interim appeal, which was rejected by Judge Torres this year. Previously, the magistrate made it clear that the “Howey” case and all of Ripple’s defenses, such as Fair Notice, would then be reconsidered.
The Fair Notice standard inquires whether an average person would have been aware of what the law forbade. There’s a possibility that the SEC might argue to Judge Torres that she wasn’t an ‘average person’ when she made her decision against them, which could feel awkward, as Alderoty pointed out.
In the perspective of Ripple’s Chief Legal Officer, the legal battle has often been likened to the thrilling novel “Moby Dick,” with SEC Chairman Gary Gensler taking on the role of Captain Ahab. For those unfamiliar with the story, Captain Ahab is a main character driven by an obsessive pursuit to hunt a specific white whale that had previously injured him. However, this relentless obsession ultimately leads to his demise and the sinking of the ship he commanded.
According to Alderoty, the recent developments in the case seem more akin to the epic chase of Moby Dick combined with the humorous legal drama depicted in My Cousin Vinny, an American comedy movie featuring an inexperienced lawyer defending his relative.
A Chicken Move?
A different individual, US attorney Jeremy Hogan, also contributed to the discussion. He clarified that the Securities and Exchange Commission (SEC) challenged the ruling concerning Ripple’s XRP sales on exchanges and use of XRP as a means of payment. However, he highlighted that the SEC did not dispute its status as a non-security in this context.
Hogan referred to the SEC’s actions as a “timid step,” asserting that they “backed down when they had the chance to genuinely bring charges against Garlinghouse and Larsen before a jury.
What do I prefer? This matter revolves around funds. However, the ruling may shift if Ripple were to lose, but this impact would be indirect, affecting mainly the requirement for compliance.” – Hogan summarized.
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2024-10-21 22:48