Ripple’s Chief Legal Officer, Stuart Alderoty, outlines several potential outcomes regarding the ongoing legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC). In a recent post on X, Alderoty suggests that the U.S. Second Circuit Court of Appeals will either affirm Judge Analisa Torres’s decision or expand upon her ruling. While he acknowledges that the SEC hopes for a remand, he considers this outcome highly unlikely.

“The 2nd Cir. will either affirm Judge Torres or expand her ruling. The best the SEC can hope for (and it’s a remote hope) is a remand,” stated Alderoty in his post.

The Chief Legal Officer further explained that Judge Torres had made it clear during the SEC’s failed interlocutory appeal that her initial ruling stood firm. This includes all of Ripple’s defenses and the significant Fair Notice argument.

The 2nd Cir. will either affirm Judge Torres or expand her ruling. The best the SEC can hope for (and it’s a remote hope) is a remand. But during the SEC’s failed ‘interlocutory’ appeal, Judge Torres made it clear that ‘Howey’ and all of Ripple’s defenses, including Fair Notice…

The Fair Notice argument questions whether a person of “ordinary intelligence” could have understood what was prohibited by law. If the case were to be remanded, this defense, along with other arguments, could be brought back into court. This situation implies that the SEC may have to argue that Judge Torres does not meet the standard of “ordinary intelligence” due to her ruling against them, which Alderoty describes as an “awkward” scenario.

Alderoty also drew a comparison to Herman Melville’s “Moby Dick,” suggesting that SEC Head Gary Gensler plays a role similar to Captain Ahab, obsessed with pursuing Ripple. He humorously added that the current circumstances resemble the courtroom comedy “My Cousin Vinny.”

In a separate post, Alderoty confirmed that the SEC has not appealed the court’s ruling that XRP is not a security. The SEC filed a Form C civil appeal, requesting the court to review the application of the law in a previous summary judgment. Specifically, the SEC wants the court to reconsider the decision concerning the sale of XRP tokens on exchanges and personal sales by Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. In an interview with Fox Business, Alderoty mentioned that the case could extend until July 2025. On October 10, Ripple filed its own cross-appeal to challenge the ruling on institutional sales.

The legal battle began in December 2020 when the SEC filed a lawsuit against Ripple Labs, accusing the company of conducting unauthorized sales of XRP tokens worth $1.3 billion. The SEC alleges that these sales were unregistered securities and that XRP created certain expectations of profit for investors, meeting the criteria for classification as a security.

Stay informed with more updates on the ongoing legal dispute and other cryptocurrency news.

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