Stuart Alderoty, Chief Legal Officer at Ripple, predicts that the U.S. Court of Appeals for the Second Circuit will either uphold Judge Analisa Torres' ruling in favor of Ripple or potentially broaden its impact. According to Alderoty, the best-case scenario for the SEC would be a "remand," where the appeal is sent back to the lower court for further proceedings. This would allow Ripple to reinstate defenses, including its "fair notice" defense.
In October, Judge Torres denied the SEC's request to certify an interlocutory appeal. Alderoty emphasized that Judge Torres made it clear Ripple’s defenses would be revisited if the case returned to her court. Specifically, the court had yet to fully address Ripple's fair notice argument concerning programmatic sales and other distributions of XRP. Should the ruling be overturned and the case remanded, Judge Torres suggested these issues could be reconsidered.
The "fair notice" defense hinges on the argument that Ripple and its affiliates were unaware that their actions were in violation of securities laws. While the court previously dismissed Ripple's claims regarding the SEC’s failure to provide adequate guidance on institutional sales, it ruled that Ripple’s programmatic sales to retail investors did not breach securities laws. In a significant development for the XRP community, the SEC recently confirmed that it would not challenge the token's legal status, marking a major victory for Ripple.
