The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has taken a new turn as both parties have jointly requested a stay order on the monetary portion of the court’s judgment. This development signals a potential filing of appeals in the case, which could have significant implications for the future of Ripple and the broader cryptocurrency market.
Ripple and SEC Seek Stay Order on Monetary Judgment
On September 4, Ripple Labs filed a letter with Judge Analisa Torres requesting a stay on the monetary portion of the judgment entered on August 7. The company is currently facing an order to pay $125 million in penalties to the SEC, with a deadline of September 6. However, Ripple and the SEC have agreed to temporarily place 111% of the monetary judgment in a trust. This amount will be held until 30 days after the appeal deadline or until the appeals process concludes, providing a cushion as both parties consider their next legal moves.
Lawyer Fred Rispoli noted that the odds of an appeal in the XRP lawsuit have increased with the recent filing. Former SEC lawyers James Farrel and Marc Fagel also believe that the SEC is likely to appeal the remedies ruling or other decisions, especially given the approaching 60-day deadline from the order issued on August 7.
Implications of a Potential SEC Appeal
If the SEC decides to file an appeal and subsequently loses, there are several potential outcomes. A significant question from the XRP community is whether Ripple would receive statutory interest if it wins on all issues. Former SEC lawyer James Farrell explained that Ripple could stay the payment of the judgment pending the appeal and might post a bond to secure this stay. Should the SEC lose, the costs associated with the bond could be charged as part of the costs of appeal under the Federal Rules of Appellate Procedure 39 (FRAP 39), at the discretion of the Second Circuit Court.
However, the scenario becomes more complex if Ripple does not file a cross-appeal. Without a cross-appeal, Ripple essentially admits that it owes the $125 million penalty, limiting the appeals court’s ability to address issues not formally presented before it.
XRP Price Reacts to Legal Developments
The XRP market has been highly responsive to the developments in the lawsuit. Following the latest filings, XRP’s price jumped over 2% and is currently trading at approximately $0.562. The 24-hour price range has been between $0.539 and $0.567, with trading volume surging by 36% in the past day, indicating heightened interest among traders.
However, analysts caution that XRP’s price could face downward pressure if it falls below the critical support level of $0.5326. A drop below this threshold could validate a bear flag pattern, potentially triggering a 15% decline to around $0.47. To counter this bearish scenario, XRP would need to rise above $0.565 and reclaim the $0.57 level, which aligns with the Fibonacci 0.382 retracement.
What Lies Ahead for Ripple and the SEC?
As both Ripple and the SEC navigate the next steps in this high-stakes legal battle, the possibility of appeals looms large. Ripple’s initial stance was against appealing, and CEO Brad Garlinghouse previously expressed skepticism that the SEC would appeal the rulings. However, with former SEC lawyers predicting government action and the formal request for a stay, the narrative appears to be shifting.
The outcome of any potential appeals could set a critical precedent for how cryptocurrencies are regulated and litigated in the United States. For now, the market watches closely, and stakeholders await further developments that could redefine the future landscape of digital assets.
As the legal strategies unfold, Ripple, the SEC, and the broader crypto community brace for what could be a defining chapter in the history of digital asset regulation.
