XRP Lawsuit Breakthrough: Ripple Eyes Major Victory as SEC Hesitates on Appeal

• Ripple gains legal edge as Judge Torres rules XRP, not security, challenging SEC’s classification.

• SEC may not appeal a recent court ruling on XRP, opting to accept Judge Torres’ decision.

The prolonged legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has seen its share of ups and downs for both parties. Recent developments suggest that Ripple might have an edge in this high-stakes confrontation.

Kristina Littman, the former head of the SEC’s Enforcement Cyber Unit, recently remarked on the potential outcomes of the case, noting that the SEC might not appeal the latest court ruling. Instead, the regulatory body might accept the decision Judge Analisa Torres handed down on July 13th. This ruling, which addressed competing summary judgment motions, rejected certain arguments from both Ripple and the SEC.

Judge Torres concluded that XRP, Ripple’s cryptocurrency, is not a contract transaction or scheme. This finding is crucial for Ripple, as it challenges the SEC’s stance that most existing digital assets should be classified as securities.

Ripple’s Legal Hurdles Continue

Despite this favorable ruling, Ripple’s legal challenges are far from over. Later this year, the cryptocurrency community anticipates that the court may amend its decision, potentially allowing the SEC to appeal. Speaking at a recent conference on digital assets, Littman indicated that several notable legal community figures disagree with Judge Torres’ reasoning.

She highlighted that Judge Rakoff’s opinion in the Terra case explicitly contradicted Judge Torres’ logic, and the Coinbase case did not substantially address the Ripple opinion, instead aligning more closely with the Terra decision. Littman suggested that the SEC might prefer to avoid escalating the district court’s decision to a higher level, where unfavorable precedents could be set.

The Ripple case has drawn significant attention, especially from legal experts and market participants. Pro-XRP lawyer Bill Morgan highlighted the positive implications for XRP holders and the broader crypto market, suggesting that this reasoning could prevent the SEC from successfully appealing Judge Torres’ decision.

Additionally, the Second Circuit Court’s previous ruling in favor of Coinbase, affirming that secondary sales of crypto assets are not securities, further bolsters Judge Torres’ judgment. Compounding Ripple’s legal issues, the company now faces a securities lawsuit in California. The case centers on allegations that Ripple’s CEO made misleading statements regarding XRP. Judge Phyllis Hamilton of the U.S. District Court for the Northern District of California indicated that XRP could be considered a security when sold in the retail market.

Market Reactions and – Implications

The market has responded positively to these legal developments with increasing XRP prices. XRP price rose by over 1%, currently trading at $0.47. Trading volume saw a minor decrease, with significant buying pressure coming from derivatives traders. Data from Coinglass indicated a 0.62% rise in total XRP futures open interest, driven primarily by activity on platforms like OKX and BitMEX.

These judicial decisions are expected to have far-reaching implications for other ongoing and future crypto-related lawsuits. Companies like Coinbase, Kraken, and ConsenSys will likely leverage these rulings to strengthen their legal positions against the SEC. The growing judicial consensus could limit the SEC’s ability to classify crypto assets broadly as securities, necessitating a more nuanced approach.