SEC Likely to Appeal Ripple Ruling, Says Former Lawyer Ahead of Deadline

• The SEC is likely to appeal the Ripple case, challenging a court ruling that secondary XRP sales are not securities.
• Ripple’s lawyer remains confident in the ruling, despite speculation and criticism from legal experts and the SEC.
• The SEC faces an October 7 deadline to file the appeal, with the case potentially extending into 2026.

According to a former SEC lawyer, the U.S. Securities and Exchange Commission (SEC) will likely appeal a court ruling in the Ripple case. The lawyer, who recently left the agency, suggests the SEC remains dissatisfied with the decision made by U.S. District Judge Analisa Torres in July 2023. This ruling determined that secondary sales of XRP, Ripple’s cryptocurrency, were not considered securities. The SEC has until October 7 to file its appeal.

The Ripple case has drawn significant attention due to its potential impact on the classification of cryptocurrencies. In July, Judge Torres ruled that while Ripple’s direct sales of XRP to institutional investors could be classified as securities, secondary market transactions did not meet the criteria for such classification. The SEC disagrees, believing this distinction is flawed and detrimental to its broader enforcement efforts.

Ripple’s Defense and SEC’s Criticism

Ripple’s top lawyer, Stuart Alderoty, stated that he would not be surprised if the SEC proceeds with an appeal. However, he remains confident that the legal status of XRP will not be altered. According to Alderoty, the July ruling is “the law of the land,” and any appeal would likely be a prolonged legal battle.

U.S. District Judge Jed Rakoff has also criticized the distinction made by Judge Torres, stating that the classification of tokens should not depend on how they are sold. Rakoff’s rejection of this approach further fuels speculation about the SEC’s intent to challenge the ruling.

A Divisive Ruling and Speculation on SEC’s Next Move

Many legal experts have speculated on the SEC’s next steps, with some arguing that an appeal is almost inevitable. The former SEC lawyer cited by Eleanor Terrett suggests that “everyone at the agency” believes the decision in the Ripple case was incorrect and needs to be overturned.

The SEC’s position on cryptocurrencies has remained inconsistent. While SEC Chair Gary Gensler has confirmed that he considers Bitcoin a commodity, the legal status of most other digital assets, including XRP, remains uncertain. If the SEC chooses to appeal, it could further extend the legal battle, potentially dragging the final resolution out to 2026 or beyond.