Ripple wins, the SEC loses. And the crypto space rejoices. For now. The three-year legal battle between the leading crypto firm and the U.S. financial regulator could move to the next round via appeal.

The U.S. financial regulator alluded to such a move last week. A statement denounced the judge's ruling as an error - a first signal for an appeal. Former SEC lawyer and cryptocurrency critic John Reed Stark also expects the same: "The judge's ruling in the Ripple case is partial summary judgment by a single district judge," he writes on Linkedin. "While the decision is important and certainly worth examining, it does not create a binding example for other courts."

Ripple's attorney, John E. Deaton, interprets the situation quite differently. An appointment would take at least two years. Until then, the current ruling stands. He does not think another judge will fundamentally challenge the initial assessment of the securities case.

An appeal is not even close to be a setback. First, it will be two years from now before a decision is issued by the 2nd Circuit, if it’s appealed. The Torres Decision is the law until then - at least in the 2nd Circuit. Second, even if the 2nd Circuit said Torres was wrong… https://t.co/GzW31D9edQ
— John E Deaton (@JohnEDeaton1) July 22, 2023

US financial regulator accuses Ripple 2020 of making its token a security. The company should have registered it with the SEC. The $1.4 billion sale was illegal. The case was heard in a district court in New York. Its assessment: The sale to institutional investors was indeed a sale of securities, but not a trade in XRP on crypto exchanges. In the verdict:

"The court noted only that a joint venture existed between Ripple and the institutional buyers. The court did not address whether the joint venture included "other XP holders." Defendants Garlinghouse and Larsen, the "XRP ecosystem" or other companies" Said Right Analisa Torres

According to John Reed Stark, this view is problematic. Institutional investors would have investor protection, while retail investors would have no rights. It is also questionable whether they are not simply speculating on the use of the company, even if they know nothing about it. He thinks it plausible that another court would reverse the split between institutional and retail investors.

The outcome of the legal dispute is considered groundbreaking for the entire US industry. Because with the same accusation, the SEC launched lawsuits against other crypto companies, such as Binance and Uniswap, in 2022.