Pro-XRP lawyer Fred Rispoli shed light on Ripple's strategy for their ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). Rispoli suggested that certain securities laws will play a crucial role in Ripple’s appeal, adding a new dimension to the case. Additionally, CEO #BradGarlinghouse reaffirmed that XRP is not a security, calming concerns within the community.
What will be Ripple's master move in the mutual appeal?
Rispoli's comments came after the SEC announced its intention to appeal the federal judge’s decision in their case against Ripple. On October 2, the SEC filed an appeal with the Second Circuit Court of Appeals, continuing its four-year legal fight with #Ripple💰 . The #SEC claims that Ripple’s sale of #Xrp🔥🔥 tokens violated federal securities laws.
Fred Rispoli, known for his strong pro-XRP stance, outlined a timeline for the legal proceedings while emphasizing the importance of Ripple’s strategy. He stated that Ripple will likely rely on so-called "blue sky" laws, which are state securities laws designed to protect investors from fraudulent practices and unregistered securities sales.
When asked how these laws would factor into Ripple’s defense, Rispoli simply responded, "Ripple will use this argument in its cross-appeal." Blue sky laws are named after the idea that some speculative investment schemes have no value other than "blue sky."
These laws require strict regulation of securities offerings at the state level, including the registration of securities, regulation of brokers, and licensing of investment professionals. Their goal is to protect investors from fraudulent sales practices and worthless investments.
The Key Role of Blue Sky Laws
Rispoli’s mention of blue sky laws adds an intriguing layer to Ripple’s legal strategy. While federal securities laws, which the SEC is enforcing, have been the main battleground, introducing state-level regulations could undermine the SEC's arguments.
Blue sky laws vary from state to state, which could provide Ripple with an additional legal advantage. If the company can prove that the sales of XRP did not violate these state laws, it could strengthen its defense.
Details of the SEC's Appeal
The SEC is currently seeking to overturn a significant portion of the July 2023 ruling by Judge Analisa Torres. The judge ruled that while institutional sales of XRP violated federal securities laws, sales to retail investors did not.
The SEC failed in its attempt to file a preliminary appeal against this ruling. Despite this setback, it continues its efforts with the Second Circuit Court of Appeals, aiming to challenge the interpretation of securities laws.
An official statement from the SEC spokesperson said the judge’s decision is inconsistent with "decades of Supreme Court precedent and securities laws." The SEC remains confident in the success of its appeal.
However, Ripple remains equally determined. Brad Garlinghouse, in his response to the SEC’s appeal, was highly critical. On the X platform (formerly Twitter), he wrote:
"If Gensler and the SEC were rational, this case would have been dropped a long time ago. This case has done nothing to protect investors but has instead damaged the SEC’s credibility and reputation."
Garlinghouse further stated that the SEC has "lost on all significant points." He also emphasized that XRP's status as an unregistered security has now become a legal precedent. He added that the SEC's failed attempt at a preliminary appeal suggested they "have no intention of challenging XRP's status as an unregistered security."
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