Ripple’s chief legal officer has outlined two potential outcomes for the U.S. Securities and Exchange Commission’s (SEC) appeal of Ripple’s XRP lawsuit. He explained the SEC’s best-case scenario and noted that Ripple’s Fair Notice defense remains strong. Ripple’s chief legal officer also reaffirmed XRP’s non-security status despite the appeal.

2 Results: Ripple’s Stuart Alderoty Weighs in on SEC Appeal

Ripple’s chief legal officer Stuart Alderoty shared his views on the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) in a post on social media platform X on Sunday.

Alderoty emphasized that the outcome of the SEC’s appeal could be limited to two possibilities: either the 2nd District Court of Appeals will affirm District Judge Analisa Torres’ ruling, or it will expand it. He elaborated:

The 2nd Circuit will either confirm Judge Torres or extend her ruling. The best the SEC can hope for (and it’s a far-fetched hope) is an order of release.

“But during the SEC’s unsuccessful ‘intermediate’ appeal, Judge Torres made it clear that ‘Howey’ and all of Ripple’s defenses, including Fair Notice, would then be subject to review. The Fair Notice standard requires that a ‘reasonable person’ would know what the law prohibits,” Alderoty added.

Ripple's chief legal officer continued:

The SEC will likely argue to Judge Torres that she was not of “normal intelligence” when she ruled against them. Tricky.

In an imaginative comparison, Alderoty likened the ongoing legal saga between the SEC and Ripple to classic stories, saying the case has always been like “Moby Dick (with [SEC Chairman Gary] Gensler playing Captain Ahab),” but now feels more like “Moby Dick meets my cousin Vinny.”

Alderoty recently emphasized that the court’s ruling declaring XRP not a security in retail sales remains intact, despite the SEC’s appeal. The agency is challenging several other elements of Judge Torres’ July 2023 decision. In response, Ripple plans to file a cross-appeal. This high-profile legal battle could have significant implications for future cryptocurrency regulations and the classification of digital assets like XRP.
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