Ripple vs. SEC: Will the XRP Legal Battle Extend Into 2025?

The discussion intensifies around the U.S. Securities and Exchange Commission’s (SEC) next move in its legal battle with Ripple. The core issue concerns the SEC’s claim that Ripple conducted unregistered security sales of its digital asset, XRP.

Despite Ripple’s court successes, the possibility of an SEC appeal persists, hinting at a prolonged dispute.

Ripple’s Legal Defense Bolstered by Deaton’s Expert Testimony

Eleanor Terrett, a noted journalist, recently shared insights from a former SEC lawyer on X, suggesting the SEC disagrees with Judge Torres’s July 2023 court ruling regarding XRP’s sales.

John Deaton, an attorney supporting XRP, has actively contributed to the case, presenting over 3,800 affidavits from XRP holders. Deaton suggests that Judge Torres’s application of the Howey Test—particularly its third prong—was thorough, countering the SEC’s critique.

He emphasized that the appellate court will likely uphold Judge Torres’s decision, reinforcing Ripple’s position.

Deaton Highlights Major Challenges for SEC in Ripple Case Appeal

Deaton explained that even if the appellate court revisits the case, the “common enterprise” factor remains a significant hurdle for the SEC. The pro-XRP lawyer argued that the SEC did not prove this aspect of the Howey Test.

John Deaton explained that even if the 2nd Circuit Court determines that Judge Torres made an error in applying the third prong of the Howey Test, this would not guarantee a victory for the SEC. Instead, the case would be returned to Judge Torres for the common enterprise component review.

Deaton suggested that Judge Torres would likely again find that the SEC had not adequately demonstrated the existence of a common enterprise. In this scenario, the SEC would face another setback, forcing it to appeal the ruling again.

Mixed Reactions and Potential Appeals in Ripple-SEC Legal Battle

The XRP community has expressed diverse reactions to this development. Jeremy Hogan pointed out that the SEC’s reaction to losing the case was expected, given they were on the losing side.

The Ripple-sympathizing attorney suggested that instead of pursuing an appeal, the SEC should reconsider whether such actions align with its primary mandate of protecting investors and encouraging capital formation, as it appears to have lost focus.

For those not familiar with the case details, Stuart Alderoty, Ripple’s Chief Legal Officer, recently declared the end of this four-year dispute, mentioning that the SEC even apologized for mischaracterizing XRP.

However, the SEC has yet to confirm whether it will challenge the recent SEC vs. Ripple case rulings. Both parties have 60 days to file appeals, with the deadline set for October 7, which marks 60 days following the final judgment.