In a development that has sent ripples through the cryptocurrency sector, Judge Torres has denied the U.S. Securities and Exchange Commission’s (SEC) motion to appeal in the high-profile case against Ripple Labs Inc. An embarrassing conclusion for SEC Chairman Gary Gensler who had a lot riding on this case.
This legal victory for Ripple has far-reaching implications not just for its native cryptocurrency, XRP, but also for the broader crypto industry. The denial of the SEC’s appeal suggests a paradigm shift in how regulatory agencies and the judiciary may view digital assets. The currency jumped 7% immediately after the news and at the time of writing.
A Victory for Ripple, A Boost for XRP
Ripple’s defense has been fortified by this latest judicial decision. The ruling effectively bolsters the company’s argument that XRP should not be categorized as a security, thereby freeing it from the regulatory constraints that come with such a designation. For XRP, the immediate repercussions are likely to be highly favorable. We can anticipate an uptick in investor confidence, which may translate into a price surge and increased adoption rates for XRP. This, in turn, could reposition XRP as a formidable player in the crypto market.

Wider Repercussions for the Crypto Industry
The denial of the SEC’s appeal sends a crucial signal to the cryptocurrency industry at large. It sets a legal precedent that challenges the SEC’s authority to regulate certain digital assets as securities. This is a welcome development for other cryptocurrency projects that are similarly positioned in the regulatory gray area. For startups and established companies alike, this could mean a more favorable environment for innovation and development, free from the threat of crippling legal actions.
Legal Reactions
In a monumental moment for the Ripple case and the broader cryptocurrency community, legal commentator John E Deaton (of Deaton Law Firm) shared an incisive analysis of Judge Torres’ latest order, describing it as “UNTOUCHABLE.” Deaton’s observation, based on his quick review of the judge’s ruling, signifies a resounding affirmation of the robustness and meticulousness of the legal proceedings. He specifically highlighted the role of evidence submitted by XRP holders in shaping the decision, emphasizing that Judge Torres carefully relied on such data to form her “findings of fact.”
Deaton has been vocal in his assertion that Judge Torres’ decision is rooted in the specifics of this particular case, rather than setting a general rule for all digital assets. The judge clarified that she never stated that no digital asset could be considered a security; rather, her ruling focused on how XRP, in the given circumstances, did not meet the criteria for being classified as a security. This narrow scope deflates the SEC’s sweeping assertions, which were reliant on expert testimony that was ultimately excluded from the case.
The involvement of XRP holders in this legal triumph can’t be overlooked. As Deaton pointed out, their submitted evidence played a pivotal role in swaying the case in Ripple’s favor, especially in discrediting the SEC’s expert witness. This collaborative effort demonstrates not just the complexities of legal battles involving cryptocurrencies, but also the potential for community engagement to influence judicial outcomes significantly. It’s a telling moment that reinforces the idea that in the evolving landscape of crypto regulation, collective action can indeed tip the scales of justice.
And let me add, my very quick perusal of her order is UNTOUCHABLE. And yes, evidence submitted by XRP holders make another appearance in this decision – in her findings of fact – that she relied on. As I’ve maintained all along, her decision is based on the facts of THIS case.…
— John E Deaton (@JohnEDeaton1) October 3, 2023
In the recent legal developments surrounding the SEC’s case, former lawyer Scott Chamberlain’s assessment underscores the inherent challenges that the SEC now faces in mounting a successful appeal. Chamberlain argues that the agency is “stuck with a subpar factual record,” which significantly complicates any future appeals process. The assertion here is twofold: First, the Supreme Court is a less likely destination for this case since there are no major legal questions to address; and second, the task at hand is merely the application of existing law to a complex but ultimately unsupportive set of facts.
Chamberlain’s comments also highlight the pivotal role of the initial court ruling in shaping the trajectory of the case. According to him, the law has remained constant; the SEC simply failed to substantiate its claims within the framework of existing legislation. This failure leads to a less favorable factual basis for the SEC, setting a high bar for any future attempts to overturn the initial court decision. Essentially, the agency finds itself in the unenviable position of having to “push a boulder uphill,” metaphorically speaking, to succeed in subsequent legal proceedings.
Lastly, the notion that the SEC has to navigate a difficult legal terrain using what Chamberlain colloquially describes as “a pointy stick” is indicative of the uphill battle that awaits. His comments serve not just as an analysis of the current situation, but also as a sobering prediction of the future difficulties the SEC will likely face. If Chamberlain’s assessment holds, it could mean that the initial ruling will have long-lasting implications, potentially serving as a legal precedent that may deter similar actions by regulatory bodies in similar cases.
I think this is more significant than people realise. Yes, the SEC can appeal later, but it is stuck with shitty factual record that makes successful appeal much more difficult. It also means Supreme Court is less likely destination – there’s no major legal questions to decide,… https://t.co/f6dOvo2fDt
— Scott Chamberlain | 🏴☠️ 🪝 (@scotty2ten) October 4, 2023
Regulatory Clarity: A Step Closer?
In the ever-changing landscape of cryptocurrency regulation, Stuart Alderoty, Chief Legal Officer at Ripple, recently underscored the significance of the Court’s July 13 ruling, stating that it was, and continues to be, “the law of the land. XRP is not a security.” This resolute declaration serves as a crucial touchstone in the ongoing legal discourse surrounding Ripple and its digital asset XRP.
Alderoty’s comment not only emphasizes the company’s confidence in the judicial process but also reaffirms the legal standing of XRP, effectively sending a strong signal to investors, regulators, and the broader cryptocurrency market. As regulatory frameworks around cryptocurrencies continue to evolve, such definitive court decisions have the potential to shape not just individual cases, but also set precedents that influence the broader ecosystem.
The ruling also opens the door to greater regulatory clarity, a long-standing issue that has plagued the crypto industry. While this single case does not solve all the ambiguities, it certainly adds a significant data point to the evolving regulatory landscape. Lawmakers and agencies may have to revisit their existing frameworks and consider more nuanced, asset-specific regulations that recognize the diverse functions and uses of digital currencies.
The Court’s July 13 ruling was, and remains, the law of the land. XRP is not a security. https://t.co/NxOXZZtSMG
— Stuart Alderoty (@s_alderoty) October 3, 2023
Potential Criticisms and Caveats
While the ruling is a boon for Ripple and other similar crypto projects, it may also spark criticism from those who argue for stricter oversight of cryptocurrencies to prevent fraud and ensure market stability. There’s a risk that the denial of the SEC’s motion could be viewed as a weakening of regulatory authority, possibly giving rise to a more fragmented and less secure marketplace.
XRP 1-Year Price Chart

A Big Win
The denial of the SEC’s motion to appeal in the Ripple case is nothing short of a landmark event for the cryptocurrency world. It not only boosts Ripple’s prospects but also could act as a catalyst for systemic change in how digital assets are regulated in the United States. Companies dealing in cryptocurrencies have been offered a glimmer of hope that the regulatory landscape may become more accommodating and clear-cut in the near future.
However, it’s essential to proceed with cautious optimism; one favorable ruling does not negate the need for responsible innovation and adherence to whatever legal frameworks do exist or may be established down the line.
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- Ex-community moderator of the Banano memecoin. I have since been involved with numerous cryptocurrencies, NFT projects and DeFi organizations. I write about crypto mainly.
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