Ripple Secures Court Approval to Delay $125M Payment Pending Appeal
Key insights:
- Ripple has received court approval to delay paying the $125 million penalty while both Ripple and the SEC consider potential appeals.
- Both Ripple and the SEC are contemplating filing appeals, and any appeal could significantly extend the timeline of the legal battle.
- Following legal uncertainty, XRP is trading at $0.55, with potential downside risks if the price breaks below key support levels.
In a recent update to the ongoing legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), Judge Analisa Torres has approved Ripple’s request to place the $125 million penalty in a trust account.
This decision comes as both parties prepare for a potential appeal regarding the court’s ruling from August 7, 2023. The monetary judgment will remain in escrow until the appeal process is resolved or the deadline for filing an appeal passes.
SEC and Ripple Agree to Stay Payment
On September 4, Ripple Labs formally requested a stay on the payment of the $125 million penalty, citing the need for more time as both Ripple and the SEC consider their next legal steps. The SEC and Ripple reached an agreement to hold 111% of the judgment amount, totaling $139 million, in a trust account.
This arrangement was approved by Judge Torres in the Southern District of New York (SDNY), preventing immediate payment to the SEC while allowing both parties time to deliberate on potential appeals.
The stay order will remain in effect for 30 days beyond the appeal deadline or until the case concludes, should an appeal be filed. Legal experts believe this move increases the likelihood of both Ripple and the SEC pursuing appeals in the case, although neither party has confirmed definitive plans.
Ripple Must File a Cross-Appeal for Full Legal Recourse
Ripple Labs faces a crucial decision regarding whether to file a cross-appeal in the Second Circuit Court of Appeals. Legal analysts have pointed out that if Ripple does not submit a cross-appeal, it would effectively be conceding to the $125 million penalty imposed by the court.
On the other hand, filing a cross-appeal could allow Ripple to challenge the monetary judgment and seek additional legal remedies.
While Ripple executives, including CEO Brad Garlinghouse, previously suggested that the company had no intention to appeal, the approval of the stay order and the trust arrangement indicates that both parties are seriously considering their options. Former SEC attorneys have expressed confidence that the government agency may file an appeal within the 60-day deadline, particularly in light of its previous legal strategies.
XRP Price Fluctuates Amid Legal Uncertainty
The ongoing legal battle between Ripple and the SEC continues to impact the price of XRP, Ripple’s native cryptocurrency. Following the latest developments, XRP’s price briefly rallied but failed to maintain momentum, trading at $0.55 at the time of writing.
Despite XRP’s initial rise to $0.564, the token saw a 15% decrease in trading volume over the last 24 hours, signaling reduced interest among traders as seen on CoinMarketCap. Analysts suggest that a sustained drop below the $0.5326 support level could result in a further decline, possibly leading to a 15% price drop.
Although the price recovery appears to have stalled, Ripple’s legal team remains focused on navigating the appeals process. Should the SEC move forward with an appeal and lose, Ripple may recover the $125 million penalty along with potential accrued interest. However, the absence of a cross-appeal would limit Ripple’s ability to contest the financial judgment fully.
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