Ripple Decision Not Final? Gensler Hints at SEC Appeal

Mon, 07/17/2023 - 20:29
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Speaking at a luncheon hosted by the Press Club DC, SEC Chair Gary Gensler has heavily hinted at a potential appeal against the recent decision in the Ripple case.

Addressing the ruling that Ripple's XRP token does not require disclosures when selling directly to exchanges, Gensler stated, "We're still looking at it and assessing."

This comment has fueled speculation that the SEC may seek an interlocutory appeal, a seldom-granted appeal that could expedite the process.

Gensler's comments suggest that the SEC views the current ruling as generating a significant enough ambiguity to warrant such an action.

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The SEC boss's public reaction to last week's summary judgment decision marked the first time he addressed the Ripple case since the ruling. He voiced disappointment with the verdict's implications for retail investors.

This statement came against a backdrop of Ripple's XRP experiencing a drop in price following a brief 80% rally in the wake of the mixed verdict that many XRP investors interpreted as an uber-bullish development for the controversial token.  

As reported by U.Today, former SEC official John Reed Stark echoed Gensler's concerns, stating that the Ripple decision sits on "shaky ground" and will likely be appealed. Stark took issue with the ruling's nuanced differentiation between private sales of XRP to accredited investors and programmatic sales to exchanges.

He contends that this could give rise to a new category of "quasi-securities," whose status changes based on the sophistication of the investor. Stark described this as "counter-intuitive, inconsistent with SEC case law, and unprecedented in this context."

The prospect of an appeal leaves the final outcome of the case, and the future regulatory landscape for cryptocurrencies, far from certain.