The Ripple vs SEC Case Awaits a Hearing and Ruling of the Second Circuit of Appeals

The Second Circuit Court of Appeals has entered an Order that the @SECGov's brief must be filed on or before January 15, 2025.

A United States Court of Appeals for the Second Circuit order now directs the Securities and Exchange Commission (SEC) to file its brief on or before January 15, 2025.

This recent development follows the SEC’s request on October 24 to extend the deadline for its principal brief to January 15, 2025. The initial court order had directed the SEC to file its brief on or before December 12.

The Second Circuit Court of Appeals is handling the appeal case after U.S. District Judge Analisa Torres concluded in September 2023 that XRP sales on cryptocurrency exchanges do not constitute investment contracts under the Howey test. However, Judge Torres ordered Ripple to pay a fine of $125 million for violating the SEC’s securities laws in XRP sales to institutional investors.

The court order now reads:

“ORDERED that the SEC-Appellant’s principal brief shall be filed on or before January 15, 2025; and it is further

ORDERED that Ripple-Appellee’s principal brief shall be filed within 30 days after service of the SEC-Appellant’s brief, but in any event no later than February 13, 2025; and it is further

ORDERED that the SEC-Appellant’s reply brief, if any, shall be filed within 14 days after service of Ripple-Appellee’s brief, but in any event no later than March 1, 2025.”

XRP Community Awaits Trump’s Victory to End Gensler’s Crypto Warfare

As the Second Circuit Court of Appeals prepares to hear the appeal case and issue a final ruling, members of the crypto community are eagerly hoping for Republican presidential candidate Donald Trump to win the 2024 elections.

Trump has previously pledged to foster crypto development in the United States by firing SEC chair Gary Gensler and hiring Web3 experts. In contrast, if Democratic presidential candidate Kamala Harris wins the election, experts anticipate a continuation of the crypto persecution.

On the other hand, Ripple is urging the Second Circuit Court to uphold Judge Torres’s ruling in its pre-argument statement, which largely found XRP to not be a security under the Howey test.

“The District Court applied the correct legal standard and correctly concluded that XRP is not an investment contract under the Howey test as a matter of law on this fully developed administrative record. The District Court also correctly concluded that XRP sales to institutional investors were not part of a common enterprise and thus were not securities transactions.”

XRPL Labs recently filed an amicus brief in support of Ripple, arguing that the SEC’s case against XRP is “fundamentally flawed.” The brief highlights the Commodity Futures Trading Commission’s (CFTC) approach to XRP, which contrasts sharply with the SEC’s stance.

“The CFTC has the expertise and experience necessary to regulate digital assets effectively. Its approach is also consistent with the Commodity Exchange Act, which gives the CFTC broad authority to regulate commodities, including digital assets, and directs it to do so in a manner that fosters innovation.”

The brief concludes by urging the Second Circuit to affirm the lower court’s ruling and “send a clear message that the SEC’s overreach will not be tolerated.”

“Affirming the District Court’s decision will ensure that the SEC cannot continue to use Howey as a blunt instrument to regulate digital assets without regard to the unique characteristics of each asset or the relevant regulatory framework.”

Impact on XRP Market: Mainstream Adoption Slows Down Due to Legal Uncertainties

The mainstream adoption of XRP has been significantly impacted by the ongoing legal uncertainties. While XRP remains among the top cryptocurrencies by market capitalization, its growth has been hindered compared to other digital assets.

The emergence of other cryptocurrency projects offering similar web3 functionality has also posed a challenge to the Ripple ecosystem. As a result, XRP could face difficulties in regaining its previous all-time highs.

Most importantly, the SEC’s case continues to drag on amid the anticipated altseason in the coming months. Consequently, Wall Street analysts believe that XRP price could again underperform in the 2024/2025 crypto bull market.

The large-cap altcoin, with a fully diluted valuation of about $51 billion and a daily average traded volume of around $1.4 billion, has been trapped in a multi-year symmetrical triangular pattern.

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