Key points:
- The SEC’s chances of success in its appeal against Ripple are estimated between 3% and 14%
- Legal experts rely on the Howey test to support their claims
- The SEC recently decided to drop its charges against Ripple CEO Brad Garlinghouse and Chris Larsen
The United States Securities and Exchange Commission (SEC) appears to be in a precarious position in its appeal against Ripple, the company behind the cryptocurrency XRP. According to legal experts closely following the case, the SEC’s chances of success are slim, ranging from 3% to 14%.
Bill Morgan, a lawyer who has studied the case, recently shared his thoughts on X. According to him, the SEC has very little chance of winning this appeal, explaining that he “doesn’t see any obvious appellable error, other than in Ripple’s favor regarding ODL sales.”
Indeed, Morgan relies on the Howey test, a legal standard used to determine what constitutes a security. He claims that Ripple fails to meet at least two of the Howey test’s criteria, making the SEC’s future even more uncertain.
Furthermore, Bill Morgan’s message is a response to a tweet from a certain ‘Jeremy Hogan‘, another renowned lawyer in the field. He also shared legal data indicating that the SEC has only a 14.2% chance of success in appeals of this nature. These statistics clearly highlight the precarious position the SEC is currently facing.
Here is the table on which Jeremy Hogan relies:
Twists and Turns in the Long Legal Battle Between Ripple and the SEC
The SEC and Ripple battled for three years before a judge ruled that the sale of XRP on cryptocurrency exchanges “does not violate securities laws.” This decision was a huge relief for Ripple, which, if you recall, saw a significant portion of its US business collapse following the SEC’s lawsuit.
More recently, the SEC also decided to drop its charges against Ripple CEO Brad Garlinghouse and Chris Larsen, the executive chairman, regarding their involvement in alleged securities law violations related to XRP transactions. This decision is naturally seen as another victory for Ripple.
As the legal battle between the SEC and Ripple continues to make headlines, the latest analysis indicates that the SEC is treading on very slippery ground. With such low chances of success, a question arises for many: should the SEC continue to pursue this case or seek a more favorable outcome for all parties involved?
