Ripple Vs. SEC: The SEC Steps Back. Is an Immediate Appeal on the Horizon?

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The U.S. Securities and Exchange Commission (SEC) has voluntarily dropped its charges against Ripple executives Brad Garlinghouse and Christian Larsen. While many crypto enthusiasts were quick to celebrate, industry experts offer another view.

CNBC Crypto Trader host Ran Neuner injected a note of caution into the happy atmosphere, tweeting that the SEC’s move could merely speed up an appeal process. According to Neuner, the SEC had to wait for the end of the case to appeal, but the dismissal theoretically frees them to appeal sooner rather than later. “Be Smart!” Neuner advises.

John Deaton’s Expert Insight: No, Not So Fast

While Neuner’s tweet seems to dampen the celebratory mood, John Deaton, Founder of CryptoLawUS and an outspoken XRP supporter, dissects the legal intricacies that most might miss. Contrary to Neuner’s speculation, Deaton contends that the SEC can’t appeal immediately.

“The case’s penalty phase must occur first,” Deaton clarifies. Using the LBRY case as a precedent, he explains that it took eight months after a summary judgment for a final, appealable judgment to be entered. This phase included extensive discovery, from interrogatories to document production, culminating in written briefs and oral arguments.

The LBRY case had $23 million at stake, and it took nearly eight months to negotiate that down to a $130K fine. The Ripple case, in comparison, has an astronomical $770 million on the line. Deaton suggests that arguing over such a mammoth sum will be an intricate and time-consuming process, especially given that Ripple will likely argue for exemptions on ODL transactions and legitimate business costs.

Deaton further crushes the notion that the SEC dismissed the case to pave the way for an immediate appeal. He compellingly argues that the SEC retracted its charges because it didn’t stand a chance at winning. Moreover, the witness list for the case would have put specific individuals in an uncomfortable spotlight, making the dismissal a strategic retreat.

While the SEC’s withdrawal of charges may superficially appear as a win for Ripple and the crypto community, John Deaton’s insights suggest that the road ahead remains uncertain and lengthy. Deaton suggests that the case could drag on for months before an appealable judgment materializes.