The SEC dropped its appeal in the XRP lawsuit, leaving everyone wondering what Ripple will do. While this seems like good news, the situation is still pretty complex.
What are the Possibilities?
Lawyer Jeremy Hogan outlined four possible scenarios:
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Ripple Appeals: Ripple could continue its appeal, potentially leading to a higher court deciding whether formal contracts are needed to define “investment contracts.”
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Ripple Drops Appeal, Court Action: Ripple could drop its appeal, sending the case back to the trial court. Both sides could then try to change the original ruling.
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Ripple Drops Appeal, Private Settlement: Ripple could drop its appeal and negotiate a private settlement with the SEC without changing the original ruling.
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Ripple Pays Up: Ripple could simply pay the $125 million fine and be done with it.
Expert Opinions
Lawyer Fred Rispoli was surprised the SEC didn’t make dropping its appeal conditional on Ripple doing the same. He thinks a deal might already be in place for Ripple to drop its appeal in exchange for a lower fine. He believes continuing the appeal is a risky gamble for Ripple, for these reasons:
- The appeals court could rule against Ripple.
- New federal laws could change the legal landscape.
- Ripple says it no longer does the things the court said were illegal.
Rispoli also pointed out that keeping the appeal alive gives Ripple leverage for negotiations to lower the $125 million penalty.
The Bottom Line
The ball is now in Ripple’s court. Everyone is waiting to see what Ripple decides to do. At the time of writing, XRP was trading at $2.49.
