After the SEC filing on Wednesday (May 8), investors must now wait for the parties and any third parties to complete the procedural court requirements. From there, the court will decide the penalty Ripple must pay for breaching Section 5 of the 1933 Securities Act.
A punitive penalty and an injunction may impact Ripple’s plans to expand in the US and XRP price trends.
However, SEC plans to appeal the Programmatic Sales of XRP ruling remain an XRP headwind. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.
The SEC attempted to appeal against the ruling with a motion for interlocutory appeal. However, Judge Torres rejected the motion in October, forcing the SEC to wait until the end of the case before filing any appeals.
Recent SEC vs. crypto court rulings fueled uncertainty about the likely success of an SEC appeal against the Programmatic Sales ruling.
In December 2023, Judge Rakoff ruled that Terraform Labs and Do Kwon breached US securities laws for failing to register TerraUSD and Luna as securities. Judge Rakoff made the crypto headlines in 2023, targeting the Programmatic Sales of XRP ruling, calling the court ruling a judicial error.