The legal battle between the US Securities and Exchange Commission (SEC) and Ripple took another notable turn when the SEC dropped its claims against Ripple executives Brad Garlinghouse and Chris Larsen.
This move has fueled speculation about an appeal, especially after Ripple sought to deposit 111% of the monetary judgment in a bank account, which is likely to secure a stay in the case.
XRP Remains a Non-Security
Former SEC regional director Marc Fagel has shared insights into what an appeal could involve, focusing on Ripple’s programmatic sales rather than XRP’s status as a security.
“If [the SEC chooses to] appeal, it will likely be over whether the programmatic sales constituted securities sales,” Fagel explained.
However, he clarified that the Court of Appeals could address this issue without deciding whether XRP is a security. This remains a peripheral issue, which is why it was just dicta, Fagel added, referring to the district court’s opinion.
Legal expert Bill Morgan also commented on the SEC vs. Ripple case via X, addressing concerns among XRP holders.
“The notion that the judge’s finding on the nature of XRP itself cannot to the subject of different treatment on appeal would not be absolute,” Morgan stated.
This assurance came when the SEC filed for permission to appeal, making it clear that the classification of XRP was not part of their appeal strategy. Morgan further pointed out that while certain legal points, like obiter dictum, might resurface during the appeal, the core judgment that XRP is not a security should stand firm.
Read more: Everything You Need To Know About Ripple vs SEC
Fagel concurred with Morgan’s analysis, adding that the SEC has remained vague in several similar cases, but it’s unlikely that the Second Circuit Court of Appeals will address XRP’s non-security status directly. Both legal experts agreed that while the appeal could explore certain legal technicalities, XRP’s classification is not expected to be challenged.
With the appeal window approaching, XRP holders can find some reassurance. Despite the potential legal maneuvering, XRP’s non-security status appears to remain intact. As Fagel and Morgan suggested, the likelihood of this being overturned is low, even as the SEC’s next move looms.
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