On Wednesday, the US Securities and Exchange Commission (SEC) officially began an appeal process against the final ruling in the case against Ripple Labs. The specific reasons for the SEC’s appeal remain unannounced yet, leaving the XRP community in the dark. However, pro-XRP lawyer Bill Morgan did just that He explained Via
The status of XRP on the secondary market is safe
Morgan highlights the difference between different types of sales, emphasizing the nature of those that are challenged in court. “There is some confusion in this around the issue of secondary sales,” Morgan notes on X, explaining, “Some people treat Ripple’s sales by automated means to retail investors via exchanges as secondary sales.”
Morgan explained that the court’s decision did not address secondary sales. “Judge Torres did not rule on secondary sales in the sense of sales that you and I would make if we went to an exchange and sold XRP to other retail investors,” he writes. He points out that this particular type of transaction remains outside the scope of appeal. “The judge made that clear in a footnote in the summary judgment decision,” Morgan adds, explaining that “that issue has not been decided and therefore cannot be the subject of appeal.”
The scope of the SEC’s appeal, according to Morgan, is narrowly focused. “The appeal as to liability is limited to automated sales or other sales and distributions by Ripple,” he says. Morgan also suggests that appeals could expand to other areas of law: “Appeals can of course extend to penalty issues, injunction issues and infringement issues.”
In a recent conversation, Morgan referred to discussions he had with former SEC lawyer Mark Fagel. “I recall that we agreed that it was likely, though not certain, that the appeal would be limited to issues related to automated sales and other distributions,” he shared, indicating consensus about the potential focus of the SEC challenge.
Meanwhile, Fox Business journalist Eleanor Terret bring Pay attention to the procedural aspects of the appeal process via X Today. She stated: “The SEC has not yet filed Form C with the Second Circuit that will detail exactly what they are appealing. They need to do this quickly so Ripple knows how to proceed.” She also noted that Ripple has set a deadline to respond, saying: “Ripple also has 14 days from today to file a counter-appeal if they so choose.”
There is high expectation within the legal community that Ripple will respond with a counter-appeal. Morgan commented simply, “I find it hard to believe that Ripple will not file a counter-appeal.” Fred Rispoli, founder of HODL Law, predicted via
Notably, Stuart Alderotti, Ripple’s chief legal officer (CLO), also suggested in his latest post on X that a cross-appeal is being considered, indicating ongoing strategic planning within Ripple in response to the SEC’s legal moves.
At press time, XRP was trading at $0.5281.
Featured image created with DALL.E, a chart from TradingView.com