Multiple crypto lawyers have theories regarding the U.S. Securities and Exchange Commission’s (SEC) ongoing case against the payments firm Ripple.
The SEC has dropped several big-name crypto enforcement actions this year, including lawsuits against Coinbase, Kraken, MetaMask and investigations into Robinhood and OpenSea.
Attorney James “MetaLawMan” Murphy theorizes that the SEC’s unexplained delay in dismissing the Ripple case could be because the firm “is negotiating hard to get the SEC to agree to vacate some or all of Judge Torres’ decision.”
The SEC first sued the San Francisco-based payments firm in late 2020 for allegedly selling XRP as an unregistered security. In 2023, District Judge Analisa Torres ruled that Ripple’s automated, open-market sales of XRP did not constitute security offerings, contrary to what the SEC alleged.
The judge did, however, side with the SEC’s claim that Ripple’s sales of XRP directly to institutional buyers were securities offerings.
The crypto legal expert Jeremy Hogan agrees with Murphy’s theory, noting that the delay in dismissing the case is likely due to the injunction in Torres’ ruling.
“The court enjoined Ripple from (basically) making sales directly to customers. There are workarounds for that, but obviously Ripple would rather not have the injunction at all!
So, assuming the SEC is willing to work on this with them, the issue is this: once a court issues an injunction, the parties themselves can’t simply agree between them to disregard the injunction! Trust me, many men have gotten in legal trouble by thinking that since they got back with their girlfriend, they could ignore the restraining order (a type of injunction) against being within 200 feet of her.
So, how do you dissolve an injunction? It’s not simple, which is why I think the case doesn’t resolve until April-May whereas all these other cases have already been dismissed.”
Hogan also explains what he thinks Ripple needs to do to get the injunction dissolved.
“Ripple only has one shot at getting the injunction dissolved with the trial court so it will have to draft a very carefully worded motion. That takes time and the SEC will basically have to sign off on it – more complication.
Once that is agreed to, both parties stip to dismiss their appeals and then Ripple files its motion with the trial court. And then the judge has to rule on the motion which can also take some time.
That’s how I see it playing out and that’s why I think May is the month – although I could see the appeals being dismissed in April, prior to Ripple’s brief due date.”
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