The legal battle between Ripple and the SEC continues, and the question on everyone’s mind is: who will win if the case goes to appeal?
The SEC’s Strong Position
Dennis Kelleher, CEO of Better Markets, believes the SEC has a 90% chance of winning on appeal. He argues that Judge Torres’ ruling, which found that institutional XRP sales were investment contracts but programmatic sales weren’t, was flawed. He claims other judges have chosen not to follow this ruling, suggesting the SEC has a strong case.
Ripple’s Confidence
However, Ripple’s Chief Legal Officer, Stuart Alderoty, remains confident in their victory. He believes the SEC has only a 10% chance of winning on appeal and plans to pay the $125 million fine imposed by the court. He suggests the SEC shouldn’t appeal, as it would be a “rational” decision not to.
Clarifying the Misconception
Kelleher’s claim that other judges have rejected Judge Torres’ ruling is not entirely accurate. Judge Amy Berman Jackson, in a separate case involving Binance US and the SEC, adopted Judge Torres’ approach. She ruled that Binance Coin (BNB) secondary sales were not investment contracts and rejected the argument that crypto itself is a security.
Both judges used the Howey Test to determine that crypto tokens are not securities. They argued that the way a token is sold is crucial to classifying it as an investment contract. Judge Torres ruled that Ripple’s XRP sales to institutional clients were investment contracts because these investors expected gains. However, retail investors who bought XRP through secondary sales couldn’t have expected gains, as they didn’t know who they were buying from.
The legal battle between Ripple and the SEC continues to be a hot topic in the crypto world. While the outcome of a potential appeal remains uncertain, both sides are confident in their arguments.
