The U.S. Securities and Exchange Commission (SEC) is currently appealing a decision in favor of Ripple Labs, which was accused of selling unregistered securities. However, lawyer Bill Morgan, closely following the lawsuit, believes that the SEC has a low chance of winning the ongoing appeal.
The SEC’s case against Ripple Labs has been ongoing since 2020, with the SEC arguing that Ripple’s XRP tokens are unregistered securities. However, a judge ruled in favor of Ripple Labs in 2022, stating that the SEC had not met the burden of proof to show that XRP is a security.
Charges against Ripple CEO Brad Garlinghouse and Executive Chair Chris Larsen, were previously dismissed by the SEC, and the ruling on retail XRP sales also went against the regulator.
Morgan, in a post on X (formerly Twitter), argued that there is no clear legal error in the ruling except for one favouring Ripple Labs regarding its On-Demand Liquidity (ODL) sales. Morgan further suggests that the SEC’s chances of success on appeal are very slim, at about 3%.
Morgan’s analysis was based on data shared by Jeremy Hogan, a lawyer who specializes in securities law. The data, which came from the government, showed that the SEC has a 14.2% chance of success in an appeal against Ripple Labs.
After three years of legal proceedings, the SEC lost its case against Ripple Labs when a judge ruled that the sale of XRP on crypto exchanges did not violate securities laws. Ripple Labs had lost significant business during the legal battle, as some major exchanges delisted XRP from their platforms.
The SEC also lost its appeal of the original ruling, with Judge Torres finding no grounds for it. Later, the SEC dismissed all charges against Ripple’s CEO and executive chair, giving the company and its executives another significant victory.
In response to the SEC’s decision, Ripple’s chief legal officer called it a “surrender,” while the company released a statement calling it a “stunning capitulation.
Morgan stated that the dismissal of the charges means there will be no trial next year. He predicted that the court will likely issue a final judgment in the case sometime next year.
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