Lawyers Caution XRP Ruling not a Definitive Victory for Crypto Industry

Attorneys are cautioning the crypto community riding on the recent ruling dismissing the security label on XRP as a partial win. The lawyers caution the digital assets community that the Thursday, July 13 ruling delivered by Judge Analisa Torres was inadequate to warrant the apparent celebration.

The attorneys consider the ruling as delivering a split-decision victory for Ripple Labs against the US Securities and Exchange Commission (SEC). The lawyers admit that the community perceives the pronouncement delivered by Judge Torres as dealing a significant blow to the regulator’s enforcement actions. 

The lawyers are critical of the perception by the community that the landmark ruling invalidates SEC’s war on crypto. Judge Torres ruled that XRP does not constitute a security when Ripple Labs sells it to the general public. 

Procrypto Lawyers Claim Victory Over SEC

The decision held by the District Court judge received an anticipated welcome and uproar from the existing XRP token holders, triggering a giant surge in the price. Industry heavyweights lauded the decision and signaled to leverage the decision to wrestle SEC following the lawsuits against the Coinbase and Binance crypto exchanges.

Luke Martin, a procrypto advocate, welcomed Judge Torres’s findings. The founder of Venture Coinist – a crypto investment firm – observed that the core argument of the SEC in the charges levied against Binance and Coinbase is they both offered unregistered securities for sale to US customers. 

Martin considers the loss suffered by SEC against Ripple Labs regarding XRP security status deals an unrecoverable blow to the regulator’s chair Gary Gensler. He termed the ruling as triggering an inconceivably bullish catalyst to the crypto industry. 

Pro-XRP attorney John Deaton echoes the sentiment conveyed by the Venture Coinist founder. He asserts that besides Ripple, Coinbase is emerging as an indirect winner from the split-decision ruling alongside altcoins recently labeled as securities by SEC when filing charges in early June 2023. 

Gemini chief executive Tyler Winklevoss held a similar observation that Judge Torres’ ruling decimates the SEC’s argument against Coinbase. In support of their twin brother, Cameron Winklevoss labeled the ruling as the watershed moment that makes it challenging for the SEC to wield authority over cryptocurrencies. 

The ruling prompted Kraken, Coinbase, Bitstamp, and iTrustShares to declare the imminent relisting of XRP, buoyed by the federal court decision. 

Reversal of XRP Win Possible at Appellate Level

Several attorneys involved in litigating matters concerning digital assets are warning against the early celebration. They confess that the XRP-led boom could end as the ruling only delivered partial victory for Ripple. 

Stephen Palley, a partner in the Brown Rudnick firm, highlights that the summary judgment only delivers a partial win for the crypto community. He cautions that Judge Torres’s ruling hardly sets a precedent for existing cases. Instead, future courts could utilize it as a persuasive commentary. 

Palley considers that SEC may consider appealing the decision with a possibility of the higher court invalidating the rulings delivered by Judge Torres. Paradigm policy executive who previously served as SEC adviser Justin Slaughter confessed that the odds are against the agency at the Supreme Court even if it snatches victory at the appellate level. 

Slaughter cites that the Supreme Court has recently portrayed hostility towards several agencies. The apex court has differed from the stance adopted by many regulators on various issues, including staffing mechanisms and APA at the agencies. The former advisor ruled out the apex court missing the chance to embrace the Democratic judge ruling to hit the agency.

Million-Dollar Earnings Through Institutional Sales Constitute Unlawful Profit

Lawyer James Murphy mandates Ripple to address the argument by SEC that its chief executive Brad Garlinghouse alongside fellow founder Chris Larsen facilitated and executed the XRPs institutional sale.

Murphy notes that the SEC submitted that the duo orchestrated the $728 million of XRP from orchestrating institutional sales. The US-based commercial lawyer Joe Carlasare corrects Garlinghouse indicating that Ripple is culpable as it realized $700 million of unlawful profit. He anticipates the SEC to contest the claim at the appellate level that Judge Torres apparently set aside.  

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