The long-standing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) may move closer to resolution by spring 2025. Legal expert Jeremy Hogan predicts the case could be settled between April and May this year.
Note that SEC Chair Gary Gensler will step down from office this month with former SEC Commissioner Paul Atkins assuming the role, bringing a potentially more crypto-friendly stance.
The case concerns whether Ripple’s XRP token qualifies as an unregistered security under U.S. law. The conflict has resulted in considerable legal actions, and both have seen a semblance of victory and losses.
The court decided that Ripple sold more than $700 million of XRP through institutional sales, violating the securities laws. Hence, Ripple was hit with a $125 million penalty, yet this penalty is temporarily suspended due to appeals from both parties.
Also Read: Ripple vs SEC Update: Here is How Experts Believe the Case Will End
Leadership Changes Could Influence SEC Strategy
The upcoming transition in SEC leadership is expected to play a pivotal role in the case’s direction. Paul Atkins, a former SEC commissioner with a history of advocating for balanced regulation, is set to replace Gensler on January 20, 2025.
Experts believe Atkins’ leadership could foster a more collaborative dispute resolution. Ripple CEO Brad Garlinghouse has expressed optimism about working with the new administration, hoping for clearer regulatory guidance and potential closure of the lawsuit.
Of particular interest, the appeals involve document submissions, setting up tactics, and negotiations, all of which Hogan opines make it reasonable to expect the goal to be reviewed and sorted in April or May at the latest.
“I’d say it’s possible but maybe unlikely. 40 days is not a lot of time to get reports together, memos, have the requisite SEC meetings, etc.. I’m going with April/May as a likely timeframe,” Hogan says.
Settlement Speculations and Potential Outcomes
Former SEC attorney Marc Fagel noted that the SEC’s new administration might halt the appeal process, paving the way for a settlement. Such an agreement would likely align with the court’s initial rulings, allowing both parties to avoid prolonged litigation.
Legal experts have suggested that even if the SEC does not entirely drop the case, it may pursue alternative resolutions like consent decrees, which would formalize compliance without conceding defeat.
As the January 15 deadline for the SEC to file an opening brief approaches, all eyes remain on the case. The outcome could significantly impact Ripple and the broader cryptocurrency industry, as it sets a precedent for regulating digital assets in the U.S.
Conclusion
The Ripple vs. SEC case is critical, with significant developments anticipated in the coming months. The leadership transition at the SEC and potential settlement discussions will shape the outcome of this high-profile legal battle, influencing the future regulatory landscape for cryptocurrencies.
Also Read: Ripple vs SEC: Could the Court Ruling be Reversed?
