In a recent interview, attorney James Murphy, also known as ‘MetaLawMan’, discussed several key developments in the ongoing Ripple vs. SEC case. His insights include the blockchain firm’s cross-appeal, the potential for an XRP ETF, and the influence of upcoming elections on the crypto regulatory space.
Murphy’s Take on Ripple vs. SEC Lawsuit
Murphy began by addressing the SEC’s appeal of Judge Torres’s ruling, which declared that Ripple’s sales of XRP on exchanges did not constitute securities transactions. This decision was a major blow to the SEC, which had hoped to classify these transactions as securities and seek further disgorgement.
The pro-XRP lawyer explained that the SEC is likely to appeal both this ruling and the fact that they were “zeroed out on disgorgement” due to the lack of evidence of financial losses. The SEC would also like to challenge the $125 million penalty imposed on Ripple. However, Murphy pointed out that Judge Torres has significant discretion in determining penalties.
Regarding Ripple’s recent cross-appeal, Murphy suggested that the firm will likely challenge the court’s determination that sales of XRP to institutional investors were securities. He noted that the XRP firm’s move is strategic, aiming to keep its options open, particularly if the SEC appeals the penalty amount.
“If they don’t file a cross-appeal, then all they can argue is 125 is right. If they cross-appeal, they could say no, it should be much lower,” the lawyer explained in the interview with Tony Edward.
Opinion on Political Arena and XRP ETF Prospects
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The discussion also touched on the political dimensions of the case, particularly the role that the 2024 U.S. elections could play in shaping the regulatory environment. Murphy pointed out that if a new president is elected and new leadership is appointed at the SEC, it could significantly alter the agency’s approach.
He speculated that “a favorable settlement or even dismissal” of the case could occur if the SEC’s leadership changes. Particularly, if Congress passes legislation clarifying that crypto transactions on exchanges are not securities, it could turn the tables.
On the topic of a spot XRP ETF, Murphy was less optimistic. He suggested that the SEC might delay approving such a product, using the ongoing litigation as an excuse.
According to Murphy, the SEC might argue that the legal uncertainty surrounding XRP would complicate disclosures required for an ETF. “They could say, look, there is uncertainty here which would make the disclosures really tricky,” Murphy commented
Murphy concluded by reflecting on the broader impact of the Ripple case, emphasizing that it is likely to influence future regulatory decisions. He mentioned that other judges have already cited Judge Torres’s reasoning in their own rulings, which increases the stakes for the SEC. Overall, while the outcome of the appeals remains uncertain, Murphy believes that Ripple has a solid chance of prevailing.
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