Ripple Labs and the United States Securities and Exchange Commission (SEC) have reached an agreement to temporarily delay a $125 million payment judgment against Ripple, potentially signaling a pending appeal. This development comes after the SEC’s case against Ripple, which has been ongoing since December 2020, took another twist following an August ruling in favor of the cryptocurrency company.
In a court filing submitted on September 4, Ripple’s legal team requested that the monetary portion of the August 7 judgment be paused. The filing was made in the U.S. District Court for the Southern District of New York, where the high-profile case has been playing out. Ripple’s lawyers proposed that 111% of the judgment, approximately $139 million, be placed in a bank account. This sum would remain there until either 30 days after the appeal period expires or until the resolution of any potential appeal.
This move seems to be laying the groundwork for a possible appeal, even though the SEC has not yet officially decided whether it will contest the court’s earlier decision. According to the court’s guidelines, either side has up to 60 days to file an appeal, as the SEC is a government agency.
The August 7 ruling was widely celebrated by Ripple’s leadership. At the time, Ripple CEO Brad Garlinghouse hailed the decision as a victory for the company. Meanwhile, Ripple’s chief legal officer, Stuart Alderoty, acknowledged the $125 million fine but expressed satisfaction with the court’s judgment overall. The ruling was particularly significant because Judge Analisa Torres found that Ripple’s XRP token was not a security when sold on public exchanges, dealing a major blow to the SEC’s case. However, this ruling did not completely absolve Ripple, as the $125 million fine was levied for direct sales to institutional investors.
Ripple’s decision to request a stay in paying the fine hints that the legal battle is far from over. The agreement between Ripple and the SEC to delay the payment could be seen as a strategic move, potentially allowing both sides time to consider their next steps. The SEC may still be weighing whether to challenge the ruling, which could prolong the case further.
Awaiting Court Approval
Currently, Judge Analisa Torres, overseeing the SEC v. Ripple case is yet to sign off on the request. Once the request is granted, Ripple will place the $139 million into an account, where it will stay until the time to appeal has expired or any appeal process is completed. This development leaves many questions unanswered, as it suggests that Ripple’s ongoing legal saga with the SEC might still be far from over.
The original SEC complaint, filed in December 2020, alleged that Ripple raised funds by selling XRP as an unregistered security. The case has since been closely watched by the cryptocurrency community, as its outcome could set a precedent for how digital assets are regulated in the U.S. Ripple executives, including CEO Garlinghouse and Executive Chairman Chris Larsen, were also named in the lawsuit, with the SEC claiming they personally profited from the sale of XRP.
In July 2023, Judge Torres issued a ruling that gave Ripple a partial victory. The judge concluded that XRP was not a security when sold programmatically on public exchanges. However, she also ruled that XRP was a security when sold directly to institutional investors, which led to the $125 million fine. This decision left both Ripple and the SEC with partial wins and losses, fueling speculation about the possibility of an appeal from either side.
As of now, the case remains in limbo, with both Ripple and the SEC seemingly positioning themselves for the next phase of the legal battle. Meanwhile, XRP’s market performance appears relatively stable. At the time of publication, XRP was trading at $0.55, according to CoinMarketCap, having risen about 17% in the past 30 days.
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