In a series of thought-provoking tweets, the renowned legal expert James “MetaLawMan” Murphy has shed light on the SEC v. Ripple case, offering intriguing insights into what lies ahead. The SEC finds itself at a critical crossroads as the dust settles after the recent ruling. Murphy outlines four potential paths the regulatory body might take, hinting at a major legal showdown on the horizon.
SEC’s Options Revealed: What’s Next For Ripple?
Option 1 on the table is the possibility of the SEC filing a request for an interlocutory appeal. Since no final judgment has been entered yet, the SEC cannot unilaterally appeal the ruling.
Instead, it would need the permission of both Judge Torres and the 2nd Circuit Court of Appeals. To secure such permission, the SEC must demonstrate that the ruling involves a crucial question of law, where differing opinions exist, and an immediate appeal would significantly advance the litigation process.
Murphy believes the SEC has a reasonable argument supporting all three elements and estimates that the request should be made promptly, typically within 30 days. Should Judge Torres approve, the SEC would have an additional 10 days to seek permission from the 2nd Circuit.
Option 2 presents the alternative of the SEC proceeding with a trial specifically on the aiding and abetting claim against Larsen and Garlinghouse before filing a regular appeal.
On the other hand, Option 3 entails the SEC dropping the claim against Larsen and Garlinghouse, which would allow the regulatory body to pursue an immediate appeal without requiring permission. Lastly, Option 4 suggests the possibility of both parties reaching a settlement.
Murphy speculates that the SEC is more likely to opt for Option 1, the interlocutory appeal. The decision stems from mounting political pressure on SEC Chairman Gensler to swiftly reverse the Torres ruling, which has sparked renewed criticism from figures like Congressman Ritchie Torres.
Moreover, the ruling has inadvertently led to global crypto exchanges re-listing XRP, thereby highlighting the SEC’s vulnerability and making the situation even more uncomfortable for Gensler and his allies.
As the case unfolds, a settlement seems improbable at this point. It is difficult to envision the SEC agreeing to a settlement with Ripple, as that would leave the Torres precedent untested on appeal. The SEC’s regulatory approach in the crypto industry heavily relies on reversing the Torres decision.
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