Lawyer Jeremy Hogan said the SEC vs. Ripple lawsuit could run beyond 2026, depending on the outcome of the current case.
In Nov. 2022, James Filan predicted Judge Torres would deliver her verdict by March 31 – setting off a buying frenzy in the run-up. However, the date passed with no judgment given.
John Deaton later chimed in, clarifying that March 31 was not the deadline. He expects the verdict to come within the next 30 to 60 days.
However, as pointed out by Hogan, the upcoming verdict may not be the end of the matter, as both parties have the right to appeal the judge’s decision.
The SEC vs. Ripple
In Dec. 2020, the SEC brought legal proceedings against Ripple on allegations it had raised over $1.3 billion in the sale of XRP tokens – an unregistered security per the agency.
The lawsuit has uncovered inconsistencies with regulatory policies, even accusations of dodgy dealings at the hands of senior ex-SEC personnel.
For example, Former SEC Director William Hinman was accused of corruption due to his ties with the law firm Simpson Thacher, a member of the Ethereum Enterprise Alliance. Ripple’s legal team argued that the SEC picked winners and losers, including granting Ethereum “not a security” status.
Over the years, Ripple Chair Brad Garlinghouse has blasted the unfair treatment of XRP. Most recently, he took aim at SEC Chair Gary Gensler, calling him an “autocrat” motivated by encouraging a vague regulatory landscape.
“When you behave like an autocrat running a $2.2B bloated agency, why would you ever want to provide clarity about what’s “in or out”? “
Hogan’s legal analysis
As Garlinghouse said in his initial reaction to the SEC filing in Dec. 2020, Ripple will take on the SEC and attempt to pave a fairer deal for the crypto industry going forward.
Hogan pointed out that previous SEC crypto lawsuits were hamstrung by the defendants’ unwillingness to fight and the size of their defense budgets.
However, with Ripple willing to fight, alongside a vast war chest, this is the case that could bring an end to spurious crypto lawsuits at the hands of the SEC, said Hogan.
“Ripple has put $100 million into fighting the SEC. And the facts for Ripple are pretty good. Better than for most crypto projects. So, this is the case where, what the SEC is doing, could be put to an end.”
Considering each scenario, Hogan said if Ripple settled, all of the effort and money spent defending its case would be wasted – as the SEC would be free to continue citing the Howey test and its subjective interpretation of that law to sue crypto firms.
This would also contradict Garlinghouse’s previously stated intent to fight for industry-wide regulatory clarity.
Hogan believes if the judge rules in favor of Ripple, the SEC will likely accept that judgment and not appeal the decision. This is because another favorable Ripple ruling at the appellant court would set a binding precedent in law.
However, if Ripple loses, Hogan imagines the firm will appeal, taking the case to the appellant court. A loss at the second circuit would mean another appeal at the Supreme Court level – taking matters well past 2026.
“Time-wise, we get the judge’s decision, let’s say, in April or May. The second circuit wouldn’t be hearing it until next year. And if it goes up to the U.S. Supreme Court, to really replace the Howey test, we’re talking two to three more years from there.
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