SEC’s Ripple Appeal Decision a “Big Mistake,” Says Legal Analyst Jeremy Hogan

A cryptocurrency law expert has taken a strong stance against the U.S. Securities and Exchange Commission’s (SEC) move to appeal a recent ruling in its continuing legal battle with Ripple Labs. In December 2020, the SEC initiated legal action against Ripple, alleging that the company had sold its digital asset, XRP, as an unregistered security.

Though institutional sales were judged to be different, a judge’s October 2023 ruling that XRP’s retail transactions do not qualify as securities represented a significant legal success for Ripple. The SEC decided to appeal this ruling in response, which infuriated the industry and sparked discussion. Stuart Alderoty, chief legal counsel for Ripple, claimed that the regulatory body was merely dragging out an already drawn-out and bitter legal struggle.

A Miscalculated Move by the SEC?

Attorney Jeremy Hogan took to X (formerly Twitter) to argue that the SEC’s decision to appeal could prove to be a costly misstep. Hogan outlined how the appeal may backfire, stating, “Big mistake by the SEC. It will appeal the programmatic sales ruling and IF it wins, it will get more money from Ripple and have protected no one.”

Hogan emphasized that the risk for the SEC extends far beyond financial matters. Ripple could potentially challenge the SEC on “Blue Sky” laws—regulations designed to shield the public from fraudulent securities offerings. Should Ripple emerge victorious on this front, the SEC’s broader regulatory authority over the crypto industry might be significantly undermined. Hogan further remarked that “it would make a poor stock trader,” suggesting the SEC’s calculated risk is misaligned with the potential fallout.

Hogan pointed out that the SEC’s chances of success are statistically slim, particularly given the detailed nature of the judge’s previous ruling. Even if the SEC were to win its appeal, Hogan believes the outcome would likely only result in additional financial penalties for Ripple, leaving XRP’s usage unaffected. He summed up his view by saying, “The SEC is very very likely to lose… it’s very very likely just a matter of money.”

As the legal proceedings continue, the future of the SEC’s influence over the cryptocurrency sector hangs in the balance, with Ripple poised to push back on multiple fronts.