Ripple News: Will the SEC and Ripple Settle During the 14-Day Appeal Period?

The SEC’s appeal against Judge Torres’s decision has been registered with the U.S. Court of Appeals. This appeal challenges aspects of the July 2023 ruling favoring Ripple, which clarified XRP’s classification outside securities regulations for programmatic sales. However, there is a lot of confusion currently with regards to this appeal.

An XRP enthusiast on X shared that the SEC and Ripple might reach a settlement within the 14-day window following the SEC’s “Notice of Appeal.” The user speculated that the SEC’s appeal was motivated by a desire to increase the initial $125M penalty, adding that XRP’s status as a non-security remains unaffected.

However, former SEC lawyer Marc Fagel weighed in to clarify, stating the appeal is not about the penalty amount, and there is no realistic basis for a settlement in this case. He explained that the SEC had already pursued an interlocutory appeal over programmatic sales a year ago, showing consistency in their approach. When asked if any room for settlement remained, Fagel said that while settlement is always a theoretical possibility, there’s no reasonable basis to expect one in this instance.

Will Ripple Cross-appeal?

Lawyer Bill Morgan responded to a tweet clarifying that the SEC has filed only a notice of appeal, not a formal appeal. This indicates the SEC may still negotiate with Ripple and potentially reach a settlement before moving forward with a formal appeal.

Discussing the potential for a settlement, the post explained that within the 14-day period following the notice, both parties could settle, which would cancel the appeal. Morgan agreed, saying that while the settlement was always an option, the ideological gap between the SEC and Ripple, especially given the SEC’s stance on crypto, makes a settlement unlikely.

He added that while the SEC and Ripple could settle on certain appeal points, Ripple might also consider a cross-appeal, challenging issues like the injunction and institutional sales. Morgan believes the SEC’s primary appeal target is programmatic sales, in line with former SEC lawyer Marc Fagel’s perspective, but added that the SEC might include challenges related to penalties and disgorgement. Should Ripple cross-appeal, Morgan suggested it should challenge the institutional sales to On-Demand Liquidity (ODL) customers.

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