Former Securities and Exchange Commission (SEC) litigator Linda Steward has forecasted a potential journey to the Supreme Court for the ongoing legal battle between Ripple Labs Inc. and the SEC. Steward’s prediction emerged during a debate with blockchain lawyers at a recent Columbia Business School event. The central issue revolves around defining what constitutes a crypto asset as a security, a matter that remains contentious within the regulatory landscape.
Steward highlighted a crucial distinction made by the SEC, which views the sales and offers of tokens as securities but does not extend this classification to the underlying asset itself. Ripple’s CEO, Brad Garlinghouse, has expressed readiness to escalate the dispute to the highest legal authority, emphasizing the company’s commitment to seeing the case through to its conclusion.
Despite securing a partial victory against the SEC in July of the previous year, Ripple continues to face substantial fines from the regulatory body. Furthermore, the SEC is anticipated to challenge the 2023 ruling, which deemed the secondary sales of XRP tokens not to constitute security offerings.
Ripple Supreme Court Standpoint
Stuart Alderoty, Ripple’s Chief Legal Officer, highlighted the Supreme Court’s recent history of ruling against the SEC in November. This observation supports the possibility of Ripple pursuing legal recourse at the highest judicial level.
According to Steward, the Coinbase lawsuit is another case that could land before the Supreme Court. Steward, who recently joined the international law firm White & Case after departing from the SEC, cited her involvement in litigations against entities like FTX, Ripple, and Terra. Her departure coincided with the SEC’s ongoing efforts to pursue a lawsuit against Coinbase. This battle ultimately saw U.S. District Court Judge Katherine Polk Failla ruling in favor of the regulatory agency in March.
Pro-XRP Lawyer Sees Victory in Govil Ruling
Earlier developments in the legal arena have shed light on potential shifts in the regulatory landscape, which could impact the Ripple vs. SEC case. Stuart Alderoty highlighted a notable setback for the SEC when the Second Circuit Court of Appeals rejected the regulatory body’s appeal in the Aron Govil case.
Bill Morgan, a pro-XRP lawyer, interpreted this decision as a positive development for Ripple’s legal position. Morgan emphasized the significance of the ruling, which affirmed that if a buyer experiences no financial loss, the SEC is not entitled to disgorgement from the seller. This development has buoyed optimism among Ripple supporters, with Morgan underscoring the implications of the Govil decision on the broader Ripple vs. SEC litigation.
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