The U.S. Securities and Exchange Commission (SEC) has officially dropped its appeal against Ripple, a move that aligns with the agency’s recent actions in cases involving Coinbase and Kraken. While this development is significant, Ripple still faces a pending cross-appeal and an unresolved $125 million fine.
This decision by the SEC has sparked speculation about potential renegotiations between the regulatory body and Ripple.
On the “Thinking Crypto” podcast, attorney Fred Rispoli discussed the likelihood of Ripple pursuing a cross-appeal to reduce or eliminate the $125 million fine. He acknowledged that Ripple is likely exploring this avenue, emphasizing that lawsuits are influenced by both legal principles and political considerations.
Political Influence and Federal Agencies:
Rispoli highlighted the political factors that often drive decisions within federal agencies like the SEC. He noted a shift in agency operations over the past two decades, characterized by increased bureaucratic processes. He also pointed out that Ripple’s case has progressed further than those of Coinbase or Kraken, explaining Ripple’s continued resistance.
Potential Outcome for Ripple’s Fine:
Regarding the $125 million fine, Rispoli suggested that it could be significantly reduced, potentially to around $10 to $12 million—an amount Ripple initially proposed. He believes the SEC’s decision to drop its appeal indicates that negotiations have already taken place.
He speculated that, in exchange for Ripple’s cross-appeal, the SEC may agree to a reduction in the fine or other concessions, such as lifting injunctions on Ripple’s operations. This would allow Ripple to operate without further regulatory restrictions.
Looking Ahead: Regulatory Clarity and Future Operations:
Rispoli also suggested that Ripple might ultimately drop its cross-appeal in exchange for a lower fine and a written agreement clarifying that its activities now comply with SEC rules. This would provide Ripple with a clear path for future operations, including raising capital and potential public offerings.
The SEC’s decision to drop its appeal marks a significant step towards resolving the long-standing legal battle between Ripple and the regulatory agency. This development opens the door for potential negotiations that could result in a reduced fine and greater regulatory clarity for Ripple.
