Attorneys Estimate SEC’s Chances of Winning Ripple Appeal Are Slim: What’s Next?

The long-standing legal battle between the Securities and Exchange Commission (SEC) and Ripple has taken another dramatic turn, and it seems the tide is increasingly turning in Ripple’s favor. After years of intense scrutiny and a high-stakes lawsuit, legal experts are now suggesting the SEC’s prospects of winning a crucial appeal are dwindling. Let’s dive into the latest developments and understand why attorneys are estimating a low probability of success for the SEC in their ongoing fight against Ripple.

Why are Attorneys Estimating the SEC’s Appeal Chances are Low?

Several factors are contributing to the growing consensus that the SEC faces an uphill battle in its appeal against Ripple. Key legal experts closely following the case are pointing to specific reasons why the SEC’s position appears weakened.

• Dismissal of Charges Against Ripple Executives: In a significant move, the SEC voluntarily dismissed charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen. This decision alone signals a potential weakening of the SEC’s overall case.
• Retail XRP Sales Ruling Against the SEC: A previous ruling in the case went against the SEC, determining that programmatic sales of XRP on cryptocurrency exchanges did not constitute securities transactions. This was a major victory for Ripple.

Adding to this perspective, Bill Morgan, a legal expert deeply immersed in the nuances of the SEC vs. Ripple saga, has weighed in with his analysis.

Bill Morgan’s Analysis: A 3% Chance of SEC Appeal Success?

According to Bill Morgan, the SEC’s appeal is facing significant headwinds. He argues that there are no obvious errors in the initial ruling that strongly favor the SEC’s appeal. In a post on X (formerly Twitter), Morgan highlighted key points:

• ODL Sales and the Howey Test: Morgan specifically points out that Ripple’s On-Demand Liquidity (ODL) sales seem to fall outside the scope of securities regulations. He believes these sales fail to meet at least two critical aspects of the Howey Test, the legal framework used to determine if an asset is a security.
• Low Probability of Success: Based on his assessment, Morgan estimates the SEC’s chances of a successful appeal against Ripple to be a mere 3%. This is a strikingly low figure, indicating a strong belief in Ripple’s position.

Morgan’s 3% estimation is even more pessimistic than data presented by Jeremy Hogan, another prominent attorney closely following the case.

Jeremy Hogan’s Data: A Slightly Higher, But Still Low, Probability

Jeremy Hogan shared government statistics on appeal success rates across various legal disputes. According to this data, the SEC’s probability of winning an appeal against Ripple is estimated at 14.2%. While higher than Morgan’s 3%, this figure still represents a low likelihood of success for the SEC.

Here’s a quick comparison of the estimated probabilities:

Both estimations paint a similar picture: the SEC is facing a tough challenge in overturning the previous ruling in favor of Ripple.

Recap: Ripple’s Wins Against the SEC

To fully appreciate the current situation, let’s recap the key victories Ripple has secured in this protracted legal battle:

• Favorable Verdict on XRP Exchange Sales: After a three-year legal battle, a judge ruled that the sale of XRP on cryptocurrency exchanges did not violate securities laws. This was a landmark victory for Ripple.
• SEC’s Appeal Attempt Rejected: The SEC’s attempt to appeal this judgment was unsuccessful. Judge Analisa Torres denied their request, stating the SEC failed to demonstrate substantial grounds for appeal.
• Dismissal of Charges Against Executives: The SEC dropped all charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen. This further weakened the SEC’s case and removed significant pressure from Ripple’s leadership.

These wins collectively signify a strong shift in momentum towards Ripple.

What Does This Mean for Ripple and XRP?

Ripple has undoubtedly weathered a significant storm. The SEC’s legal pursuit had a tangible negative impact, leading to the delisting of XRP from major cryptocurrency exchanges and causing business disruptions. However, these recent developments suggest a brighter future for Ripple and XRP.

Stuart Alderoty, Ripple’s Chief Legal Officer, didn’t mince words, calling the SEC’s dismissal of charges a “surrender.” Ripple itself described it as a “stunning capitulation.” These strong statements reflect the magnitude of Ripple’s perceived victory.

With the dismissal of charges against executives and the low probability of a successful SEC appeal, the trial that was anticipated for next year is now off the table. Bill Morgan anticipates that the court will likely deliver a “final judgment” sometime next year, potentially bringing this long chapter to a close.

Looking Ahead

While the legal saga may not be completely over until a final judgment is delivered, the current landscape is overwhelmingly positive for Ripple. The estimated low chances of the SEC winning their appeal, combined with previous victories, suggest that Ripple is on solid legal ground.

For the XRP community and the broader cryptocurrency market, these developments are being watched with keen interest. A definitive win for Ripple could have significant implications for crypto regulation in the United States, potentially setting precedents for how digital assets are classified and regulated.

Key Takeaways:

• Legal experts estimate the SEC’s chances of winning its appeal against Ripple are low (3% – 14.2%).
• Ripple has secured significant victories, including a favorable ruling on XRP exchange sales and dismissal of charges against executives.
• The SEC’s appeal attempt was rejected by the judge.
• A final judgment in the case is expected next year.
• A Ripple victory could have broader implications for crypto regulation.

The SEC vs. Ripple case has been a landmark event in the cryptocurrency space. As we await the final judgment, the current trajectory suggests a significant win for Ripple, marking a potential turning point in the regulatory landscape for digital assets.