Former SEC official Marc Fagel has indicated that the U.S. Securities and Exchange Commission (SEC) may appeal the court ruling regarding secondary sales of XRP. This follows a landmark decision which found that primary sales of XRP were not securities. However, Fagel highlighted that the Ripple case did not address secondary market sales, which the SEC might now target.
Ex-SEC Marc Fagel Predicts SEC Appeal in Ripple XRP Case
According to Marc Fagel, the SEC is likely to appeal the decision on the secondary sales of XRP. He emphasized that the previous Ripple court ruling explicitly excluded these sales from its verdict, thus opening a window for the SEC to readdress this issue.
The former SEC official emphasized,
”I’m just saying they’re not foreclosed by the Ripple decision from bringing a case against another entity selling XRP as a security”
Fagel’s commentary sheds light on potential future actions by the SEC, which remains vigilant in interpreting what constitutes security under its jurisdiction.
In response, Lawyer Bill Morgan questioned the rationale behind treating the Bitnomial XRP futures as security futures contracts. He pointed out the inconsistency in regulatory enforcement, especially when comparing XRP to similar cases with Ethereum (ETH), where the SEC had previously shown no objections to the futures contracts.
Morgan expressed frustrations, stating,
“I cannot abide such arbitrary enforcement. No wonder the crypto market is so distorted towards Bitcoin and Ethereum.”
Legal Challenges and Industry Reactions
In addition, Ripple CEO Brad Garlinghouse has criticized the SEC’s persistent stance that XRP is a security despite court rulings suggesting otherwise. His criticisms underscore a broader industry frustration over what many see as arbitrary and overreaching regulatory actions.
Garlinghouse’s comments came after the SEC was perceived as disregarding a judicial decision during its ongoing litigation with the crypto derivatives exchange Bitnomial. In support, Brad promised Ripple would follow up on the developments to hold the commission accountable.
Moreover, the Bitnomial case itself has become a significant point of contention. The exchange has argued that XRP futures should be regulated by the Commodity Futures Trading Commission (CFTC), not the SEC. Concurrently, the exchange advocates that XRP is not a security and should not be subjected to such stringent securities laws.
These developments come amid Ripple’s cross-appeal in the ongoing legal battle with the US Securities and Exchange Commission (SEC). This strategic legal move by Ripple aims to address unresolved issues beyond the initial ruling that XRP is not a security. Specifically, the cross-appeal will tackle the broader implications of the SEC’s claims about XRP sales on various exchanges and other distributions, which the SEC had attempted to appeal earlier.
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