In a significant development this July, a court brought an end to the protracted legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) over the classification of XRP as a “security.” The presiding judge, Judge Torres, ruled that XRP does not qualify as a security when purchased by individual retail investors.
However, for large corporations that had acquired XRP in the past, the classification remains uncertain. This outcome has been perceived as a partial victory by the XRP community, and the celebrations continue to reverberate.
Despite this partial win for Ripple, the SEC seems far from satisfied. In a recent court filing made just this Wednesday, the SEC announced its intention to pursue an “interlocutory appeal” against Judge Torres’ ruling.
A prominent member of the XRP community took to social media to remind everyone of Ripple’s previous stance. Ripple had indicated that if the SEC recognized XRP as a non-security, a swift settlement could be expected. Given the recent court ruling affirming XRP’s non-security status and the SEC’s own acknowledgment of this fact in their latest court submission, questions naturally arise regarding the remaining hurdles obstructing a settlement.
In response to these developments, John Deaton, a pro-XRP figure, suggests that for Ripple and the SEC to reach a settlement by year-end, they would require the approval of Judge Failla regarding Coinbase’s request, at least to some extent. This would entail acknowledging that certain types of cryptocurrency transactions do not fall within the purview of U.S. securities laws.
Should this occur, it could compel the SEC and its chairman, Gary Gensler, to reassess their approach. Deaton expresses doubt that the Solicitor General would endorse an appeal, as it could potentially escalate the matter to the Supreme Court, potentially curbing the power of not only the SEC but also other federal agencies.
Deaton articulates this scenario, stating, “The only conceivable path for Ripple and the SEC to reach a settlement before the year’s end hinges on Judge Failla granting Coinbase’s Motion to Dismiss (or partially granting it), which would entail recognizing that token sales on an exchange in a blind bid/ask transaction do not fall under U.S. securities laws but would allow the staking component to progress.”
