The SEC may not protect investors even if it wins the appeal.
Ripple could challenge the SEC's power over the crypto market.
Leadership changes at the SEC could speed up legal outcomes.
The U.S. Securities and Exchange Commission has opened an inquiry regarding a recent verdict on the $XRP token. Legal expert Hogan has provided insights into this lawsuit's implications. His analysis suggests that this legal move could reshape the conditions for cryptocurrency regulation in the United States.
SEC's Appeal: A Risky Decision
Hogan argues that the SEC's choice to appeal the ruling on programmatic sales may be a big mistake. If the SEC wins, it could gain more funds from Ripple but might not protect investors in any meaningful way. Consequently, Ripple could use this situation to challenge the SEC's authority through its "Blue Sky" law issue.
https://twitter.com/AbsGMCrypto/status/1841666980916428904
A victory for Ripple could reduce the SEC’s powers over the broader digital goods industry. Moreover, Hogan highlights that this appeal is a legal right. The trial judge cannot reject it, which sets it apart from previous SEC attempts to appeal.
The Likelihood of SEC Losing
Hogan believes that the SEC is likely to lose the appeal based on statistical trends. The judge’s earlier ruling was heavily fact-based, and this supports his prediction. Even if the SEC wins, Hogan thinks the outcome will mostly involve financial aspects. Thus, there would be little change regarding XRP’s status or its use by Ripple.
Additionally, the timeline for this appeal plays a crucial role in the process. The SEC is expected to clarify which specific issues it will contest in the coming weeks. After this, the agency must file its first brief by mid-December. The SEC cannot appeal the ruling that states "XRP is not a security." This restriction will direct focus toward whether the appeal will address the earlier injunction.
Implications of Leadership Changes
Hogan notes the unusual timing of Attorney Grewal’s departure from the SEC. This event happened on the same day the appeal was filed. Such timing raises questions about the agency’s future direction. Changes in leadership at the SEC could significantly impact how the agency handles ongoing cases like Ripple's. New leadership might speed up resolutions and change regulatory strategies.
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