Appeals Court Issues First Order in Ripple Vs SEC Lawsuit

The United States Court of Appeals for the Second Circuit has issued its first order in the ongoing case between Ripple and the Securities and Exchange Commission.

In response to the SEC's request, the court scheduled January 15 as the deadline for the principal brief. The court also noted that the motion for extension or other relief would be denied.

Meanwhile, Ripple Chairman Chris Larsen and its CEO, Bradley Garlinghouse, seek to dismiss SEC charges in a class suit. Amid these developments, XRP grapples with bearish pressure, trading around $0.52.

Court Issues Its First Order in SEC vs Ripple Appeal

The Ripple/SEC lawsuit continues with the Court of Appeals rending its first order after the parties' Form C filing.

The courtorderedthe US SEC to submit its appellate opening brief by January 25. This comes after the commission requested that the appeals court schedule the deadline for its principal brief for January 15 next year.

This suggests that no significant update regarding the lawsuit will emerge until next year. Legal experts believe the delay could be due to Donald Trump's rising odds of winning the US presidential election. Donald Trump winning the election potentially risks Gary Gensler's position as SEC Chair.

The court also warned that failure to file the brief on the set date would lead to the dismissal of the appeal case. The court informed both parties that it would not grant any motion to extend the deadline or request other relief.

Ripple's Execs Garlinghouse and Larsen Push to Dismiss Charges

The US SEC included Ripple's Executive Chairman Chris Larsen and CEO Brad Garlinghouse in its securities violation claims. In its pre-argument statement, the commission said it is challenging XRP sales by Ripple and its two executives, Larson and Garlinghouse.

The SEC is also challenging the company's distribution of XRP to its employees and other institutions. The agency believes the conduct of Ripple and its executives during these sales violates federal securities laws.

However, Ripple questions whether XRP sales qualify as an investment contract. It questions whether an investment contract must have post-sales obligations of a seller, an agreement, and profit expectations based on the seller's efforts.

Also, Ripple wants to determine whether the district court's ruling is flawed. It wants the appeals court to examine how the district court applied the Howey test to its institutional XRP sales.

Further, the company challenges how the Howey Test, established in 1946, applies to a novel technology like crypto. The company also revived its fair notice defense in the counter-appeal.

Meanwhile, Garlinghouse and Larsen's lawyers, Rahul Mukhi, Nowell Bamberger, and Samuel Levander, had successfully obtained a dismissal of all SEC claims in the district court.

In the In re Ripple Labs Litigation, Judge Phyllis Hamilton ordered the parties to seek an alternative resolution. Ripple Labs, Brad Garlinghouse, XRP II LLC, and lead plaintiff Bradley Sostack asked the court to dismiss the case in the final judgment on the class action securities violation claims.

How's Ripple's XRP Fairing Today?

Meanwhile, amid these developments, XRP's price declined slightly over the past 24 hours, now trading at $0.518. The asset has struggled to perform relative to other top coins this year.

Some believe the ongoing lawsuit is partly to blame for this underperformance as whales go on selling sprees amid the latest developments.

Regardless, some analysts remain optimistic. One analyst, Armando Pantoja, predicted that XRP could reach $25 if Trump wins the election and fires SEC Chair Gary Gensler.

$25 $XRP? It's not just a dream-it's within reach. Trump elected, Gensler fired and it's possible. #XRP #XRPArmy REPOST THIS! pic.twitter.com/w1SgVqvOhP

- Armando Pantoja (@_TallGuyTycoon) October 31, 2024

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