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With Kraken referencing Ripple’s summary judgment in its motion to dismiss SEC charges, Attorney Morgan thinks a settlement in the Ripple case is improbable at the moment.
Several legal experts have suggested multiple ways the SEC v. Ripple lawsuit could be resolved. While many speculated that the lawsuit might be resolved via a court ruling, others predicted that the parties could agree on a settlement that could potentially end the multi-year legal battle.
Notably, Attorney Bill Morgan thinks the lawsuit will not end in a settlement anytime soon. According to Morgan, recent developments in the SEC v. Kraken lawsuit could negatively affect the chances of a settlement in the Ripple lawsuit.
Kraken References Ripple Ruling in Recent Motion
Morgan called attention to how crypto exchange Kraken cited Ripple’s summary judgment in its motion to dismiss charges brought against it by the SEC.
Citing Judge Analisa Torres’ decision on Ripple’s programmatic sales of XRP, Kraken argued that the SEC showed no relationship between the tokens it alleges to be securities and its customers.
It bears mentioning that tokens on crypto exchanges like Kraken are traded via blind bid/ask- a type of transaction that Judge Torres found to be a non-investment contract. Per the Ripple verdict, Judge Torres emphasized that there is no relationship between traders and issuers of XRP.
One of the reasons backing Judge Torres’ decision, according to Morgan, is that XRP retail traders do not expect to make profit from Ripple’s efforts.
Interestingly, Attorney Morgan said Kraken is also extending the Ripple decision to the 11 tokens, which the SEC alleges to be securities, including ADA, MATIC, and ALGO.
Why a Settlement is Improbable at the Moment
Per Morgan, Kraken leveraging Judge Torres’ decision on programmatic sales in its motion to dismiss shows why the securities regulator could be motivated to appeal the Ripple verdict.
Additionally, he noted that the recent development in the Kraken lawsuit is another reason why a settlement in the Ripple lawsuit will not happen anytime soon.
The manner in which Kraken uses the finding of Judge Torres on programmatic sales in the summary judgment decision in its own motion to dismiss shows why the SEC will be strongly motivated to appeal Judge Torres’ decision. It is why a settlement of the SEC v Ripple case seems so… https://t.co/n1uYaOlh1d
— bill morgan (@Belisarius2020) February 23, 2024
Should the SEC agree to settle with Ripple and not appeal, several crypto businesses will continue to reference Judge Torres’ decision as a legal precedent to bolster their defenses against the regulator.
Will the SEC Appeal After Final Judgment?
Meanwhile, the SEC attempted to overturn Ripple’s decision earlier in the case. However, Judge Torres denied the SEC’s request to file an interlocutory appeal and ordered the commission to wait until all pending matters in the case are resolved.
The remedies phase is the only pending issue in the case and is expected to be resolved before the year ends.
It remains unclear whether the SEC would appeal to the Second Circuit once Judge Torres issues the final judgment.