In a recent Twitter thread, renowned XRP community lawyer Fred Rispoli shed light on the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). Rispoli’s insights suggest that the much-anticipated trial between Ripple executives Brad Garlinghouse and Chris Larsen and the SEC might never see the light of day.
Ripple And SEC Trial “Won’t Happen”
Rispoli’s assertion revolves around the SEC’s initial strategy. He stated, “It’s painfully obvious that suing those two initially was only to pressure Ripple into a weak settlement position.” This suggests that the SEC’s move might have been more tactical than substantive, aiming to corner Ripple into a position of vulnerability rather than genuinely seeking justice.
Furthermore, Rispoli highlighted the potential spectacle of bringing former SEC officials William Hinman and Jay Clayton to the witness stand. While the Hinman documents have exposed questionable practices and potential corruption at the U.S. Securities and Exchange Commission (SEC), former SEC Chairman Jay Clayton is likely interested in protecting his own skin. Rispoli mused, “Even though it may be unfair, personally I would have a field day tying those two to their roles in the ‘Trump Administration’ to a jury in New York City!”
The lawyer also touched upon the inherent challenges the SEC would face in proving its case. For instance, the SEC’s task of proving recklessness regarding institutional sales becomes monumentally challenging when Ripple can counter-argue by pointing to programmatic sales, which are generally considered above board. Additionally, Rispoli pointed out the weak distinction the SEC has made between domestic and international sales, suggesting that their evidence in this regard might not hold water in court.
Adding to the SEC’s woes, Rispoli mentioned the recent reorganization of the SEC’s trial team. Such internal shifts can often indicate a lack of preparedness or confidence. Moreover, the SEC’s back-to-back trial schedule could strain its resources, making it less likely for them to be adequately prepared for a high-stakes trial against Ripple.
Rispoli’s analysis of the SEC’s position was summed up with a poignant observation: “SEC went all in and if this Hail Mary doesn’t work, well, it will be interesting to see how exactly SEC tries to structure its loss.” This statement paints a picture of an agency that might have overreached and is now scrambling to find a face-saving exit.
When Decision On Interlocutory Appeal?
Rispoli’s thread also sparked a series of questions from the XRP community, seeking further clarity on the unfolding legal drama.
One user inquired about the expected timeline for the appeal, to which Rispoli responded that previous rulings on interlocutory appeal requests have taken Judge Torres four to six weeks. “There are not a lot of times this happens, but that would be a good range to bank on IMO,” stated the lawyer.
Another user posed a question about the possibility of the SEC dropping a part of the case. Rispoli clarified the procedural intricacies, stating, “Yes, but the SEC has to get permission from the Court to do so. It would be humiliating for the SEC to just ‘drop’ the claim. I’m not sure it has humility, but I bet we can’t find one instance of this happening previously under similar circumstances.”
Lastly, when probed about the potential financial penalties Ripple might face, Rispoli admitted to the complexity of the issue, remarking that he doesn’t have a solid answer to it at the moment. There is a $700+ million number floating around, “but this will be litigated significantly in the remedies phase of the case.”
At press time, XRP traded at $0.5098 after falling below the 200-day EMA.
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