Ripple Withdraws Appeal, SEC to Make Decision on XRP by July 3

The Ripple Labs and U.S. Securities and Exchange Commission legal tussle is approaching a pivotal point, with Ripple opting to withdraw its cross-appeal recently. All eyes are now on July 3, the day of reckoning for the SEC to take a stand on its appeal, a decision that could have far-reaching implications not just for XRP but also for the broader regulatory framework of digital assets in the U.S.

In December 2020, the SEC took Ripple Labs to court, alleging that the company violated security laws by raising more than $1.3 billion through an unregistered securities sale of XRP. Fast forward to July 2023, when U.S. District Judge Analisa Torres delivered a significant ruling, asserting that XRP doesn’t qualify as a security when traded on exchanges by the general public but does so when sold to institutional investors. Both Ripple and the SEC contested parts of this ruling. While Ripple questioned the verdict regarding sales to institutional buyers, the SEC aimed to reverse the decision that ruled secondary market transactions and other distributions didn’t meet the definition of securities offerings.

Ripple CEO Brad Garlinghouse confirmed on June 27 that Ripple was withdrawing its cross-appeal, hinting that the SEC was expected to follow suit. This followed the denial of a joint motion by both parties requesting the court to annul a permanent injunction and reduce Ripple’s $125 million penalty. With Ripple stepping out of the appellate process, all eyes are now on the SEC’s impending move. The SEC has until July 3 to make a call: drop its appeal altogether, proceed to the appellate court, or take a different legal route, all determinants that will shape XRP’s regulatory fate.

A complete dismissal of the appeal by the SEC would cement Judge Torres’ ruling that XRP isn’t a security in public exchange transactions. This would offer the much-needed legal clarity that Ripple, its partners, and the cryptocurrency industry have been longing for. It would also remove the shadow that has loomed over XRP for close to four years and potentially trigger a substantial price surge, sparking optimism within the XRP community. Notably, Captain Redbeard, a vocal XRP advocate, recently underscored the significance of this imminent decision, suggesting that a verdict in Ripple’s favor would pave the way for a new dawn for XRP.

For Ripple, a conclusive legal triumph would mean redirecting efforts towards expanding its payment infrastructure and global alliances without the SEC’s constant oversight. Meanwhile, XRP holders and market observers are bracing for a potential surge in adoption and market confidence. Legal experts anticipate that should the SEC opt to withdraw its appeal, it could signal a less stringent enforcement stance after a string of legal setbacks. If this unfolds, the Ripple case could serve as a watershed moment in U.S. crypto regulation history by preventing other cryptocurrencies from being labeled securities in secondary market dealings.

With the SEC’s deadline around the corner, the stakes are higher than ever. A complete exit from the appeal process by the SEC would bring a sense of closure to a protracted legal battle that has significantly influenced the narrative on cryptocurrency regulation. However, if the SEC chooses to elevate the matter further, ambiguity and the risk of further defeats for the regulatory body would persist. July 3 looms as a make-or-break moment, with the spotlight firmly on XRP’s legal fate and the broader implications for crypto regulation in the U.S.