As 2024 winds down, the long-standing legal battle between blockchain company Ripple and the Securities and Exchange Commission (SEC) is still hanging in the balance. However, there are signs that a resolution might be on the horizon.
The case is at a critical point, with key deadlines looming. Specifically, the U.S. Court of Appeals for the Second Circuit set January 15, 2025, as the date for the SEC to submit its opening brief in the Ripple appeal. This filing is pivotal, as it will outline the SEC’s legal arguments.
Meanwhile, Ripple’s Chief Legal Officer, Stuart Alderoty, has clarified that the appeal isn’t about whether XRP is a security. Notably, back in 2023, Judge Analisa Torres ruled that XRP isn’t a security, which was a big win for Ripple and the broader crypto community.
“The case is not about whether XRP, in and of itself, is a security. XRP is uniquely situated as having clarity (alongside BTC) in not being classified as a security. The SEC is not challenging that ruling which stands as the law of the land,” he said.
Ripple has also filed a Form C for a cross-appeal, but Alderoty pointed out that the review will stick to the current record. From early on in the case, he’s been quite vocal about what he sees as the SEC’s “lawless tactics.”
While there is no final verdict, the industry is optimistic about a possible settlement ending the four-year saga.
XRP security status
After the initial victory in 2023, the likelihood of XRP being reclassified as security has significantly diminished, especially after Judge Torres ordered Ripple to pay a fine of $125 million in August 2024 for violating securities laws, far from the SEC’s $2 billion demand. Importantly, there was no finding of fraud or investor harm.
If the case gets stayed, it might push the SEC to drop its appeal, potentially setting a precedent for how XRP’s programmatic sales are viewed in the U.S. digital asset market.
At the same time, Ripple has questioned the relevance of the 1946 Howey Test for today’s cryptocurrencies. Some say it’s outdated, while others praise its adaptability, which allows quicker regulatory response without new laws.
Ripple has insisted that XRP, like Bitcoin (BTC), enjoys a clear legal status in the crypto world and is not classified as a security.
Impact of Trump win on Ripple case
Adding a twist to the legal drama is Donald Trump’s election victory, and his promise to support crypto might change the outlook for the case.
Industry insiders and legal experts are optimistic about how a Trump administration could influence this case. There’s talk that the SEC might rethink its strategy under Trump.
In this line, if Paul Atkins, known for his pro-crypto stance, gets the SEC nod, he might push for dismissing the case or at least negotiate a more favorable deal for Ripple.
Attorneys like Jeremy Hogan and Fred Rispoli have suggested that new SEC leadership might review ongoing crypto lawsuits, including Ripple’s.
Hogan believes that non-fraud crypto cases could be settled. At the same time, Rispoli sees a settlement as likely but not a complete dismissal, predicting new leaders might find the case “idiotic” and settle on easier terms.
Notably, Alderoty has urged the upcoming administration to “cleanse the lingering stain of Hinman” from the SEC. The reference to William Hinman, the former SEC director, points to the ongoing criticism of Hinman’s 2018 speech, which has been a contentious point in Ripple’s legal defense.
Ripple contends that inconsistencies in the SEC’s stance on cryptocurrency classifications have harmed innovation and market clarity.
XRP price analysis
At the time of posting, XRP was trading at $2.21, up 1.05% in the last 24 hours and 11.5% on the weekly timeframe.
The conclusion of the legal battle will be crucial for XRP’s potential growth. After consolidating below $1, the token saw a bounce after the November election, but wrapping up the case could be a significant boost.
