The latest judgment in the Ripple case was a huge milestone victory for the crypto industry. The verdict was mixed per se, but the key takeaway was the declaration of XRP as a non-security. Even though sales on most fronts [programmatic] got exempted from the securities tag, the judge ruled that the institutional sales of the tokens violated federal securities laws. However, when it comes down to its On Demand Liquidity [ODL] product, several controversies continue to unravel, stirring uncertainty and chaos within the community. When asked if ODL-related sales were considered securities, Ripple CTO David Schwartz noted that the team was still “figuring” that out.
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Odds of an appeal
Even though a decision is out, it is not game over yet. The institutional end is still hanging loose, while the individual defendants’ issues will also still go to trial. In fact, several from the industry believe that Ripple’s current victory could just be short-lived. JPMorgan analysts recently asserted that the SEC will likely appeal the judge’s decision.
In fact, they also feel that the agency will continue pursuing similar cases going forward. Moreover, Attorney Jeremy Hogan also recently tweeted how “most attorneys” he has seen think that the SEC “will appeal.”
That being said, he further went on to point out how the SEC has “more to lose than gain” by appealing. He highlighted that if the agency wins the appeal, it will pull back some “adverse trial-level case.” However, if it loses at the appellate level, he explained, how “every Court in the 2nd DCA must follow the decision.” This could turn a “molehill into a mountain,” according to Hogan. As far as Ripple’s side of the equation is concerned, the Attorney noted,
“Ripple probably won’t appeal IF it can pay the fine and IF the ODL part of the ruling doesn’t mess up its business. Which factors all point towards “no appeal” for me. Plus, Ripple won. And only losers appeal.”
Is the ball in Ripple’s court?
Despite question marks still lingering, Ripple’s Chief Legal Officer [CLO] is optimistic about the future. In a recent interview with CNBC, Stuart Alderoty was asked if the ruling meant that American banks will return to Ripple to use its ODL product for cross-border transactions. Reverting back to the same, he said,
“I think the answer to that is yes.”
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Ripple’s CLO is hopeful that the latest decision will give financial institution customers. Explaining what to expect during this quarter, he explained,
“Hopefully this quarter will generate a lot of conversations in the United States with customers, and hopefully some of those conversations will actually turn into real business.”
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