July 17, 2023 at 12:32 GMTModified date: August 9, 2023 at 10:09 GMT
July 17, 2023 at 12:32 GMT

SEC likely to hold back its appeal in Ripple case

The SEC might potentially hold itself back from appealing against the Ripple case ruling, according to Haun Ventures CEO Katie Haun.

Ripple (XRP). Pic: Shutterstock

The SEC might potentially hold itself back from appealing against the Ripple case ruling, according to Haun Ventures CEO Katie Haun.

Haun was previously a federal prosecutor before taking up the role of the top executive of the crypto-focused venture capital firm.

Last Thursday, Judge Analisa Torres granted a partial summary judgement in favour of Ripple Labs regarding XRP’s status as a security.

Now, if the regulator was to lodge an immediate appeal against the Ripple case ruling, it would be a “surprising” move as Haun believes that the agency is gaining from the “current confusion”. This lack of “legal clarity” is way better than the SEC losing an appeal as that could then “jeopardise its entire enforcement actions” for the future.

Haun further said: “Anything is possible, but an immediate appeal seems unlikely both because the agency would have to ask the court to split this decision from the portion going to trial and because I’m sceptical the SEC actually wants legal clarity.”

Haun is not alone in her viewpoint. The other commentators who have taken a similar view include Ripple Labs CEO Brad Garlinghouse and U.S. lawyer and Ripple commentator Jeremy Hogan.

Garlinghouse is of the belief that it may “take years” before the SEC lodges an appeal, which would further only reinforce Judge Torres’ decision that XRP is not a security. Hogan, on the other hand, thinks that the SEC will launch an appeal after the trial between SEC and Ripple ends. This event is scheduled for early 2024.

The recent court ruling has been heralded as a ‘watershed moment’ as it will make it difficult for the SEC to claim authority over cryptocurrencies. However, many in the industry believe that it would now only lead to more confusion. Commentators have also called for Congress to take action and give legal clarity to crypto in light of the recent ruling.

Haun has long stated that in case of the Congress’ inaction, the courts, and not the SEC, will have a final word. However, she believes that it would be most appropriate for Congress to set the policy for the future of this technology in the US owing to the complexity of the court’s reasoning, which was evident even in the recent ruling.

She articulated her “musings” on the Ripple decision in a tweet which said: “Former commissioner of the Commodity Futures Trading Commission, Brian Quintenz, who is currently the head of policy for crypto venture capital fund a16z also spoke along the same lines. According to him, the Ripple court ruling “only results in more uncertainty for entrepreneurs and builders”.

In his article titled “It’s time to move crypto from chaos to order”, he said: “Ultimately, what the Ripple ruling makes obvious is that the rules are anything but clear. And without clear rules, the SEC’s current regulation-by-enforcement posture toward crypto is hurting, not helping American innovation.”

The lack of well-defined guidelines in the space has left entrepreneurs and investors in a state of uncertainty since forever. US Senator Cynthia Lummis also called for an urgent need for Congress to establish a clear and comprehensive regulatory framework for the cryptocurrency industry.