Although Ripple has withdrawn its cross-appeal against the SEC, the protracted XRP litigation is still not completely over. While the XRP community cheers for the long-awaited settlement of the Ripple vs. SEC case, lawyer Marc Fagel insists that the litigation will not be fully resolved unless the SEC withdraws its appeal.
Why is the XRP lawsuit not over yet?
Former SEC lawyer Marc Fagel holds an opposing view to the jubilant claims about the end of the XRP lawsuit, stating that the case is still unresolved. According to him, the Ripple lawsuit will continue until the SEC votes to drop its appeal. However, he expressed in a post on X that he believes the SEC will eventually withdraw its appeal, thus resolving the case.
This development has raised questions about the scope of the SEC's prior voting, especially whether the vote included authorization for the SEC to withdraw its appeal in the event of a settlement. XRP lawyer Bill Morgan queried Marc Fagel on this, questioning whether a new vote is needed since the settlement agreement is conditional and its conditions have not yet been met.
Interestingly, Fagel clarified that the SEC's vote to approve the settlement agreement does not necessarily mean they also voted to dismiss the case. He acknowledged the uniqueness of this matter and emphasized the uncertainty of the SEC's vote results. He stated:
They voted to approve the settlement agreement; simply dismissing the case is another matter. That said, we do not know exactly what they voted on—it's indeed unusual for them to approve two options simultaneously, but this whole matter is not normal.
Notably, Fagel's statement comes at a time when there is increasing celebration of the so-called XRP lawsuit settlement, with Ripple having dropped its appeal. His remarks sparked controversy, prompting many to retract statements claiming that the Ripple lawsuit has been fully resolved. For example, XRP lawyer Bill Morgan previously stated, 'The SEC's lawsuit against Ripple is finally over,' but later he 'slightly backtracked' and referenced Fagel's statement.
Is reaching a settlement with the SEC a mistake in the lawsuit?
While many have praised the settlement agreement between Ripple and the SEC, some have criticized it as an admission of wrongdoing by the platform. However, Morgan rebutted these arguments, claiming:
A settlement does not imply an admission of guilt. Most settlement agreements are reached without an acknowledgment of liability. Ripple has never admitted that the assets it sold to institutions were investment contracts.
Additionally, Morgan also questioned the claim that Ripple's key victory lies in the conclusion that 'XRP = non-retail use security.' He believes this interpretation is inaccurate and added that Ripple's key victory stems from Judge Torres's ruling that XRP itself is not a security, a ruling based on the court's reasoning. Previously, while both parties awaited Judge Torres's ruling on their joint motion, Morgan insisted that the ruling would not affect the legal status of XRP.
Furthermore, Morgan believes that this reasoning implies that, regardless of how XRP is sold or distributed, it is more akin to a commodity. This distinction is crucial as it emphasizes that the court's ruling does not depend on the specifics of retail sales or secondary market transactions, but rather on the inherent nature of XRP.
