Gary Gensler, the chair of the SEC, made a strong allusion to a prospective appeal of the recent ruling in the Ripple case while speaking at a luncheon hosted by the Press Club DC.
In response to the finding that direct sales to exchanges of Ripple’s XRP coin do not necessitate disclosures, Gensler said, “We’re still looking at it and assessing.”
This remark has increased the likelihood that the SEC would ask for an interlocutory appeal, which is seldom granted but might speed up the procedure.
According to Gensler’s remarks, the SEC believes that the existing rule creates a large enough degree of uncertainty to justify taking such action.
The SEC chairman spoke on the Ripple case for the first time since the summary judgement decision last week in his public response to it. He expressed dissatisfaction with how the ruling might affect small-scale investors.
In the aftermath of the mixed ruling, which many XRP investors viewed as a very optimistic event for the contentious coin, Ripple’s XRP experienced a price decline after a quick 80% spike.
Gensler’s worries were mirrored by former SEC official John Reed Stark, who said that the Ripple decision is on “shaky ground” and will probably be challenged, according to U.Today. Stark objected to the ruling’s subtle distinction between programmatic sales to exchanges and individual sales of XRP to approved investors.
According to him, this might lead to a brand-new class of “quasi-securities,” whose status varies depending on how sophisticated the investor is. This, in accordance with Stark, is “counter-intuitive, inconsistent with SEC case law, and unprecedented in this context.”
The likelihood of an appeal makes the case’s eventual result and the legal environment for cryptocurrencies in the future far from guaranteed.
