Ripple's chief legal officer, Stuart Alderoty, has provided his insights on the ongoing legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC). In a social media post on Sunday, Alderoty outlined two possible outcomes for the SEC's appeal in the Ripple lawsuit involving XRP. He also highlighted the strength of Ripple's Fair Notice defense and reiterated that XRP is not a security, despite the appeal.
According to Alderoty, the outcome of the SEC's appeal is likely to be one of two possibilities: either the Second Circuit Court of Appeals will uphold District Judge Analisa Torres' ruling or it will expand upon it. He explained that the best-case scenario for the SEC would be a remand, but that is a remote possibility.
Alderoty also emphasized that during the SEC's unsuccessful "interlocutory" appeal, Judge Torres made it clear that Ripple's defenses, including the Fair Notice defense, would be reconsidered if the appeal were to be expanded upon. The Fair Notice standard examines whether a person of ordinary intelligence was aware of what the law prohibited.
Alderoty further noted that the SEC could potentially argue that Judge Torres lacked ordinary intelligence when she ruled against them, which would be an awkward position for the agency.
In an imaginative comparison, Alderoty likened the ongoing legal battle between Ripple and the SEC to classic stories. He stated that the case has always felt like "Moby Dick" with SEC Chair Gary Gensler playing the role of Captain Ahab, but now it feels more like "Moby Dick meets My Cousin Vinny."
Alderoty recently emphasized that the court ruling declaring XRP as not a security in retail sales remains valid, despite the SEC's appeal. However, the SEC is challenging several other aspects of Judge Torres' decision in July 2023. In response, Ripple intends to file a cross-appeal. This high-profile legal battle could have significant implications for future cryptocurrency regulations and the classification of digital assets like XRP.