Once again, XRP finds itself in the limelight due to rumors surrounding the Securities and Exchange Commission’s (SEC) plan to appeal. Based on the court’s schedule, the SEC is required to submit its appeal-related brief by January 15. In the context of the prevailing US political climate, prominent attorney and XRP advocate John E. Deaton has shared his forecasts for Ripple’s trajectory. He suggests that Ripple may be poised to launch an Initial Public Offering (IPO) by late 2025 or early 2026, contingent on the swift confirmation of Paul Atkins as SEC Chairman. Deaton believes that the SEC will likely withdraw its appeal, which could resolve the legal conflict and enable Ripple to concentrate on growth and an IPO.
Possible Outcome if SEC Withdraws Appeal
Deaton has outlined several compelling reasons why the SEC’s appeal might not succeed. Firstly, the ruling in question is not binding for other cases and does not have a wide-ranging application to all cryptocurrency sales. Judge Torres determined that the SEC failed to prove that XRP sales in the secondary market constituted securities under the Howey Test. Even if the SEC were to succeed in the appeal, it would likely return to Judge Torres, who could still rule against the SEC based on other factors.
If the SEC decides to take the case to the Supreme Court, they may risk a more substantial defeat. The Court might establish a precedent that favors cryptocurrencies, an outcome the SEC likely wants to avoid. Deaton believes that under Paul Atkins, the SEC would recognize this risk and opt to withdraw the appeal. Should this occur, Ripple would likely be required to pay a fine, bringing the case to a close.
With a favorable outcome, XRP could reach unprecedented levels, and there is speculation that it could surpass its 2021 all-time high (ATH) of $3. Some analysts predict that XRP could even reach $19 if the SEC drops the case.
The Weaknesses in the SEC’s Appeal
Deaton highlights several weaknesses in the SEC’s appeal. Firstly, Judge Torres’ decision is not a binding precedent and has faced criticism from legal scholars and other judges, including Judge Rakoff in the same district. Secondly, the decision’s narrow scope means it does not broadly exonerate all secondary market sales of digital assets, focusing instead on the SEC’s failure to meet the criteria of the Howey Test in Ripple’s case.
Even if the SEC were to win the appeal, the case would likely be sent back to Judge Torres, who could apply other Howey factors and potentially reach the same conclusion. Furthermore, should the case escalate to the Supreme Court, the SEC risks facing a significant loss.
Ripple’s IPO and Regulatory Clarity
With the legal battle potentially resolved, Ripple could shift its focus to launching an IPO. Deaton views this as a significant step for both the company and the cryptocurrency industry as a whole. Going public would provide Ripple with additional resources and credibility while demonstrating how regulatory clarity can facilitate the growth of crypto companies.
Deaton anticipates that Ripple’s legal battle with the SEC might conclude on a positive note, paving the way for the company to spearhead crypto innovation and emphasize the advantages of clear regulations.
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