The U.S. Securities and Exchange Commission (SEC) is facing a dilemma after Judge Analisa Torres' recent ruling that the sale of XRP on exchanges is not a security.
According to James A. Murphy, a cryptocurrency lawyer and commentator, the SEC has at least four options to continue the case, but the most likely is to file a provisional appeal.
This means that the SEC will seek permission from both Judge Torres and the 2nd Circuit Court of Appeals to appeal the decision before the case is concluded.
Murphy explained that in order to be allowed to appeal, the SEC must show that the decision contains a major legal issue, that there are significant differences of opinion on the issue, and that an immediate appeal can significantly advance the case.
He said the SEC needs a good argument that all three elements are present.
Murphy added that there is no specific deadline for the initial request, but that it must be done immediately within 30 days. If Judge Torres agrees, the SEC will have 10 days to appeal to the 2nd Circuit.
James A. Murphy Finds Low Chances of Ripple and SEC Settlement
Other options for the SEC, according to the attorney, include continuing the aid and abetting suit against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen, dropping the claim and filing an immediate appeal, or settling with Ripple.
Murphy said he believes a compromise at this point is unlikely, because the entire “regulation by sanction” program the SEC is running against the crypto industry is dependent on Torres' decision being reversed.
Murphy also noted that there is great political pressure on SEC Chairman Gary Gensler to immediately reverse the Torres decision, as crypto exchanges around the world have relisted XRP, making the SEC look bad.
Murphy said he expects the SEC to file an appeal in the next two weeks and believes it would be in the best interest of Ripple and the XRP community that the appeal process begins now, not a year later. He also said that he considers Ripple's chances of appeal positive.
*Not investment advice.
