The United States Securities and Exchange Commission (SEC) has been dealt another setback in its ongoing legal battle against Ripple Labs. District Court Judge Analisa Torres has dismissed the SEC’s interlocutory appeal motion. On October 3, Judge Torres based her decision on the regulator’s failure to convincingly demonstrate “controlling questions of law” and “substantial grounds for differences of opinion.”
While this stands as a setback for the SEC, it doesn’t mark the end of the litigation. The trial has been scheduled for April 23, 2024, to further examine the outstanding issues of the case.
Jeremy Hogan, a well-regarded lawyer in the XRP community, emphasized the impact of this recent ruling, “the SEC’s motion for interlocutory appeal DENIED. Which means, the case either goes to trial in April, or goes away. AND, this Order allowed the Judge to explain parts of her ruling even better, making appeal that much harder for the SEC to win.”
Echoing these sentiments, Bill Morgan conveyed his satisfaction with the decision: “Great news. SEC smashed. No interlocutory appeal. Trial now confirmed for 23 April 2024.”
Upcoming Dates For Ripple And The SEC
Diving deeper into potential timelines, attorney Fred Rispoli provided a speculative roadmap for the litigation. He marked the April 2024 trial date and proposed that it could last for eight weeks or more. Rispoli further noted the importance of upcoming pre-trial motions expected in December 2023, followed by rulings in early 2024.
According to Rispoli, “after trial, there will be substantial post-trial motions by both parties. These will take a few months just for briefing, likely completed around September-ish 2024. Appellate briefing to the 2nd Circuit would not be completed until around February 2025.”
If the case goes to the 2nd Circuit, it will take “about a year to decide the case”, predicts the lawyer, adding that around February 2026 a ruling can be expected. “Supreme Court decision–assuming it accepts review–would be Feb. 2027 or later. Bottom line is we’re LOCKED IN for XRP-not-a-security (from a judicial perspective) until February 2026 at the earliest.”
Scott Chamberlain, a former lawyer and co-founder of Evernode XRPL, expressed his views on the broader ramifications of the recent court decision: “I think this is more significant than people realize. Yes, the SEC can appeal later, but it is stuck with shitty factual record that makes successful appeal much more difficult. It also means Supreme Court is less likely destination […] Now it has to push shit uphill with a pointy stick if it wants to win.”
In August, Judge Torres ordered a jury trial, which will involve Ripple Labs, CEO Brad Garlinghouse, and co-founder Chris Larsen. Initially, this trial was projected between April 1 and June 30, 2024. However, due to scheduling conflicts, the trial date has been adjusted to April 23, 2024.
Garlinghouse and Larsen’s counsel reported their unavailability from April 1-14, 2024. On the other hand, Ripple Labs communicated their readiness for a trial at any point in the second quarter of 2024. Meanwhile, the SEC indicated its unavailability on several dates in April and May.
Pivotal trial deadlines have been established. All involved parties must submit any motions by December 4, 2023, with oppositions due by December 18, 2023. Furthermore, December 4 is also the cutoff for all required pretrial filings, including their proposed joint pretrial order, requests to charge, verdict form, and voir dire questions.
At press time, the XRP price stood at $0.5893 and showed a modest reaction to Ripple’s victory, rising 3% since the announcement.