As the October 7 deadline approaches, anticipation grows over the possibility of an appeal by the U.S. Securities and Exchange Commission (SEC) in its ongoing legal battle with Ripple Labs. The case centers around the classification of Ripple’s native cryptocurrency, XRP, as an unregistered security, a pivotal issue that has significantly impacted XRP’s value amid the prevailing market uncertainty.
Prominent cryptocurrency attorney Fred Rispoli recently commented on the growing likelihood of an SEC appeal. He highlighted a key development: Ripple and the SEC agreed to deposit 111% of the disputed amount in a trust, to be held until 30 days after the October 7 deadline or until the appeal is resolved. Rispoli interprets this move as a sign of the SEC’s hesitancy in disclosing its full intentions. He currently estimates a 60:40 likelihood that the SEC will move forward with the appeal.
As this deadline nears, speculation swirls among market analysts and legal experts, many of whom are debating the legal grounds on which the SEC may base its potential appeal.
Ripple vs. SEC – Legal Background And Recent Developments
The Ripple case dates back to December 2020, when the SEC accused Ripple Labs of selling XRP as an unregistered security. This lawsuit has been a focal point in the broader debate over cryptocurrency regulation and whether digital assets should be classified as securities under U.S. law.
In a landmark ruling on July 13, 2023, Judge Analisa Torres determined that programmatic sales of XRP did not meet the criteria of an investment contract under the Howey Test—a standard used to assess whether a transaction qualifies as a security. This ruling favored Ripple and marked a significant blow to the SEC’s case.
However, in August 2023, the SEC attempted to file an interlocutory appeal to challenge Judge Torres’ ruling before the case concluded. The court denied the SEC’s motion in October, postponing any appeal until the trial reaches its final conclusion.
Despite this temporary setback for the SEC, Ripple’s Chief Legal Officer Stuart Alderoty emphasized that the agency’s argument regarding “fair notice” could still be pivotal in other ongoing cryptocurrency cases. The SEC continues to pursue legal actions against major players in the industry, including Binance, underscoring the unresolved regulatory framework governing digital assets in the U.S.
XRP Price Reaction Amid Legal Uncertainty
The looming SEC deadline and ongoing legal uncertainty continue to cast a shadow over XRP’s price performance. Currently, XRP is trading at $0.5868, reflecting a 0.78% decline in the past 24 hours. The market remains in a cautious holding pattern as investors await the SEC’s next move.
Despite the regulatory headwinds, some market analysts remain optimistic about XRP’s long-term potential. A crypto analyst known as Altstreet Bets has forecasted a bullish trajectory for the token. Utilizing the Elliott Wave theory—a method of predicting market cycles—Altstreet Bets suggests that XRP is in the early stages of a broader rally. The theory predicts a short-term price correction to around $0.55 before a more sustained upward trend takes shape, possibly pushing XRP closer to the $1 mark in early 2024.
Also Read: XRP Soars – $17.4M Withdrawal From Upbit Fuels 106.6M Trading Volume Surge, Outpacing Bitcoin
What Lies Ahead for Ripple and the Cryptocurrency Industry?
The outcome of the SEC’s decision to appeal, or not, could have far-reaching implications for both Ripple and the broader cryptocurrency market. Should the SEC appeal, it would reignite concerns about regulatory clarity for digital assets in the U.S., potentially affecting the classification of various cryptocurrencies in secondary markets. For XRP holders and investors, the uncertainty remains a double-edged sword: while the legal limbo pressures the token’s price, a favorable resolution could trigger a long-term bullish surge.
As the October 7 deadline approaches, all eyes are on the SEC’s next move, with many hoping for clarity in an otherwise murky regulatory environment. The Ripple case could very well shape the future of cryptocurrency regulation in the United States.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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