Ripple CEO Brad Garlinghouse announced yesterday that the US Securities and Exchange Commission (SEC) will drop its appeal against the company in the XRP lawsuit. However, the lawsuit’s ultimate conclusion remains uncertain, as the next move largely hinges on Ripple’s decision to either continue or withdraw its own appeal.
What’s Next in The XRP Lawsuit?
Lawyer Jeremy Hogan took to X to shed light on the ramifications, noting: “The SEC has apparently dropped its appeal, but we don’t know if Ripple agreed to the same.”
Hogan explained that Judge Analisa Torres’s ruling stands as the maximum negative outcome Ripple currently faces—namely a $125 million penalty plus an injunction. Unless Ripple continues its appeal, that judgment appears to be the baseline.
Hogan then laid out four potential scenarios: First, Ripple can continue its appeal, leading to a ruling from an appellate court on whether “investment contracts” require formal contracts. Second, Ripple can opt to drop its appeal and jurisdiction returns to the trial court, where both parties could attempt to amend the judgment.
Third, Ripple could drop its appeal and both parties enter into a private agreement without modifying the judgment. Lastly, Ripple could simply pay the $125 million and moves on. Summarizing the situation, Hogan remarked: “There are 4 possibilities left… That’s all folks!”
Another pro-XRP attorney, Fred Rispoli, also shared his perspective via X, expressing surprise that the SEC did not condition the dropping of its appeal on Ripple doing the same: “Wow! I cannot believe the SEC did not tie dropping its appeal to Ripple also dropping its appeal. Best explanation is that the agreement has already been made for Ripple to drop its appeal in exchange for a significantly reduced fine.”
Rispoli suggested that without the SEC’s appeal in play, Ripple now has considerable leverage. In his view, continuing the appeal may be an “unnecessary gamble,” citing three main reasons: The US Court of Appeals for the Second Circuit “can rule against Ripple.” Moreover, potential “federal legislation” could change the legal landscape, offsetting Ripple’s earlier loss. Also, Ripple has asserted that it no longer engages in the specific activities deemed illegal.
Moreover, Rispoli pointed out the strategic element of retaining the appeal for negotiation: “Maintaining it for now IS the legal ‘consideration’ that would sufficiently justify reducing $125M penalty in exchange for dropping appeal.”
Overall, with the SEC having dismissed its appeal, eyes now turn to Ripple’s counsel and executives.
At press time, XRP traded at $2.49.
