As the long-standing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) intensifies, attorney John Deaton has laid out a critical path forward for both parties. Following Judge Analisa Torres’ denial of the SEC’s motion for an indicative ruling, Deaton said the only way to secure a new XRP judgment is if the SEC acknowledges its missteps and works collaboratively with Ripple.
SEC Must Recognize Flaws and Shift Regulatory Narrative
In a recent live stream, Deaton—a pro-crypto attorney and former U.S. Senate candidate—emphasized that the SEC must withdraw prior arguments and openly acknowledge that it erred in how it pursued the XRP case. According to him, this would also require referencing pending crypto-related legislation in Congress, which increasingly classifies crypto tokens as commodities rather than securities.
The implication is clear: for any revised judgment to succeed, the SEC must reframe its authority over crypto assets, aligning with the evolving regulatory landscape. Judge Torres had previously ruled the SEC’s motion as “procedurally improper” after the Commission sought to reduce Ripple’s civil penalty to $50 million and obtain relief from an injunction.
Legal Experts Weigh In: Difficult Road Ahead
Attorney Fred Rispoli echoed Deaton’s analysis, calling a favorable re-judgment an “uphill battle.” He proposed that both Ripple and the SEC submit 25-page motions outlining prior dismissed cases and urged the SEC to include signed declarations from its Commissioners admitting regulatory shortcomings.
Rispoli believes the Commission’s concession would strengthen the case for revisiting the judgment. However, he estimates that it could take two to three weeks for both parties to finalize filings, followed by an additional one to two weeks for Judge Torres to respond.
SEC’s Internal Tensions Surface Amid Proposed Settlement
Adding to the case’s complexity, internal conflict has emerged within the SEC. On May 8, Ripple and the SEC filed a joint settlement letter in New York federal court. The agreement requested the dissolution of the August 2024 injunction against Ripple and proposed that $75 million of the $125 million in civil penalties held in escrow be returned to the company.
However, SEC Commissioner Caroline Crenshaw fiercely criticized the move. Known for her skeptical stance on cryptocurrencies, Crenshaw argued the deal would damage the agency’s enforcement credibility.
“This settlement, alongside the programmatic disassembly of the SEC’s crypto enforcement program, does a tremendous disservice to the investing public,” she stated on May 8.
Crenshaw’s opposition underscores fractures within the SEC, raising broader questions about the agency’s ability to maintain a unified position on crypto regulation.
XRP Price Slips as Legal Uncertainty Continues
Amid these developments, XRP has seen increased volatility. The token dropped over 4% following Judge Torres’ decision and is currently trading near $2.40, down around 2% over the past 24 hours.
The legal back-and-forth continues to weigh on investor confidence, even as some in the industry remain hopeful for a favorable resolution that could provide long-awaited regulatory clarity for digital assets in the U.S.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
