SEC has 3%–14% chance of success in Ripple appeal, lawyers predict

The SEC has already dismissed charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen, while the retail XRP sale ruling also went against the regulator.

The United States Securities and Exchange Commission has a very slim chance of winning its appeal against Ripple in the ongoing lawsuit, according to lawyer Bill Morgan, who has been closely following the lawsuit.

Morgan, in a post on X (formerly Twitter), argued that there is no obvious appellable error other than in “Ripple’s favour regarding ODL sales which don’t meet at least two prongs of the Howey test,” while adding that there is a very slim chance of about 3% for SEC’s success in getting an appeal against Ripple.

I don’t see any obvious appellable error other than in Ripple’s favor in respect of ODL sales which don’t meet at least two prongs of the Howey test. The SEC’s prospects of success on appeal are very slim and I feel generous today so I am giving it 3% chance of success on appeal https://t.co/FRIFbqzmVA

— bill morgan (@Belisarius2020) October 22, 2023

Morgan’s prediction came in repose of another statistic shared by Jeremy Hogan, a prominent attorney, who shared government data on the rate of success of appeals in different types of lawsuits. The data suggests the SEC has a 14.2% chance of winning the appeal against Ripple.

The SEC fought a long-drawn court battle against Ripple for three years before a judge ruled that the sale of XRP on crypto exchanges doesn’t violate securities law. The judgment came as a major win for Ripple, which lost a significant chunk of business during the SEC lawsuit in the U.S. as major crypto exchanges delisted XRP (XRP) from their platforms.

The SEC also lost an appeal against the judgment in which Judge Analisa Torres ruled on Oct. 4 that the security regulator failed to meet its burden to show that there were controlling questions of law or substantial grounds for differences of opinion on the ruling.

Later on Oct. 19, the SEC moved to dismiss all the charges filed against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen, offering another major victory for Ripple and its executives.

Today was an even better day.
Ripple: 3
SEC: 0

In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a… https://t.co/YsQxewFnj9

— Brad Garlinghouse (@bgarlinghouse) October 19, 2023

Ripple chief legal officer Stuart Alderoty called the SEC’s move “a surrender,” while Ripple, in its official statement, deemed the SEC’s move a “stunning capitulation.”

Morgan noted that the SEC has dismissed the rest of the case, so there will be no trial next year, and predicted that the court might give a “final judgment (probably) sometime next year.”

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