The ongoing legal fight between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has turned a new page as the SEC is still to submit its important Form C to the Second Circuit Court of Appeals. The form is necessary for explaining the details of the SEC’s appeal against a decision that partially favored Ripple, which stated that XRP is not a security in some situations.
🚨NEW: The @SECGov has not filed its Form C with the Second Circuit yet which will detail what exactly they’re appealing. They need to do that pronto so that @Ripple knows how to proceed. Ripple also has 14 days from today to file a cross-appeal if they choose to.
Form C: pic.twitter.com/IomvRZXw9N
— Eleanor Terrett (@EleanorTerrett) October 3, 2024
The SEC had on October 2, 2024 submitted a notice of appeal of Judge Torres’ July decision that had concluded Ripple’s sales of XRP to retail customers were not securities transactions.
But non-submission of form C (which is a critical form in ensuring transparency and regulation compliance in crowdfunding operations, both in investor trust and in legal process in a case like Ripple’s appeal) has created uncertainty about its legal strategy.
Reasons for the Delay
The could be various reasons for the delay but the community speculate the reasons for delays as follows:
- Strategic Positioning: The SEC may be using the delay to prepare solid arguments.
- Negotiating Leverage: The delay could also provide the SEC time to explore settlement opportunities with Ripple that could avoid prolonged litigation.
- Market Impact: The appeal itself has negatively impacted the token’s price, and this delay could further cause a dip in the price, shaking the investor confidence in Ripple and its future.
Ripple’s Cross Appeal
Ripple’s Chief Legal Officer, Stuart Alderoty indicated that the company is considering filing a cross-appeal against the aspects of Judge Torres decision, particularly concerning the $125 million penalty imposed on XRP. The filing of Form C from SEC’s side becomes crucial because after it is filed, XRP would know in which direction to go about and how to proceed with the cross-appeal.
If Ripple decides to proceed with the cross-appeal, it has to be filed 14 days from October 3. Delay from SEC will not work in XRP’s favor as they would be shooting in the blind with the cross-appeal.
Legal experts speculate that such delays could cause delay in proceedings, potentially extending the case until 2026.
As the XRP community closely monitors the entire situation, there are concerns hovering over the implications of these appeals on cryptocurrency regulations and market dynamics. The situation remains haywire as of now but will set a significant precedent for future cases in the crypto market after the case is resolved.
