In July 2023, U.S. District Judge Analisa Torres ruled that XRP sales to retail investors do not qualify as securities transactions. However, the judge deemed institutional sales as unregistered securities offerings. Following this ruling, the SEC imposed a $125 million penalty on Ripple, significantly less than the $2 billion initially sought.
Recently, the SEC filed an appeal against this favorable ruling for Ripple. This appeal, announced in early October 2024, aims to challenge specific aspects of the decision. The SEC particularly focuses on Ripple’s programmatic sales through intermediaries. Former SEC attorney Marc Fagel suggested that the appeal might center on the legality of these sales, which could impact broader cryptocurrency regulations.
Community Reactions and Market Impact
Prominent crypto expert Zach Rector emphasized that the XRP community rallies behind Ripple. They believe the SEC has weakened its position after controversies like the Debt Box case. In this case, the SEC faced sanctions for falsifying evidence. Additionally, Gurbir Grewal’s resignation as the SEC’s Director of Enforcement adds to this sentiment of instability within the agency.
Following the SEC’s appeal announcement, XRP’s price fell by about 11%. However, it stabilized around $0.53 shortly after. Despite this initial downturn, analysts remain optimistic about XRP’s long-term potential. They note historical price patterns and recent whale activity indicating strong market interest.
Ripple’s Stance
Ripple’s leadership remains vocal in their criticism of the SEC’s actions. CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty labeled the appeal as “disappointing but not surprising.” They also described it as an “embarrassment” for the agency. Furthermore, they reaffirmed their commitment to continuing this legal battle and expressed confidence in a favorable outcome.
Broader Implications
The ongoing legal battle between Ripple and the SEC could significantly impact cryptocurrency regulation in the U.S. If Ripple wins, it may set a precedent for how other cryptocurrencies are treated under securities laws. Conversely, a successful appeal by the SEC could prolong market uncertainty and affect other crypto entities facing similar scrutiny.
As these events unfold, both Ripple and its supporters remain vigilant, anticipating potential opportunities amid challenges posed by regulatory actions.
Read Also: XRP’s Bearish Outlook: Will the Death Cross Push Prices Lower?
