Ripple Legal Battle Paused, SEC Report Expected

One of the most closely watched legal battles in the digital asset world has picked up a new twist as the U.S. Court of Appeals for the Second Circuit has officially paused the ongoing appeal between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs.

According to a court order shared publicly by James K. Filan, a defense attorney and former federal prosecutor, both parties, Ripple Labs and the SEC, jointly requested a stay of proceedings. The court agreed and put the appeal on hold and by extension, freezing the case for now.

Ripple Lawsuit May Reshape Crypto Regulation

The SEC is also ordered to file a status report within 60 days. It’s expected to provide clues as to the direction the case may take in the future and whether this is it, or whether it will see a settlement, continued litigation, or an altered regulatory posture moving forward.

It was a lightning rod in the broader debate over crypto regulation, originally filed in December 2020. The suit takes aim at Ripple Labs, its CEO Brad Garlinghouse and executive chairman Chris Larsen, and it also impacts Ripple Lab by proxy in some manner with Ripple Lab being represented by attorney John Deaton among others.

The problem is whether or not XRP, Ripple’s native cryptocurrency, is to be classified as a security under U.S. law, a decision that could have rippling effects throughout the crypto industry. This court case could present a bellwether for the industry and could set a precedent for how other tokens will be treated by regulators.

Filan’s post on X (formerly Twitter) drew an overwhelming amount of speculation and analysis from the XRP community online. While the pause is a pause, some say it is a possible back door to a more complete resolution or regulatory certitude.

The crypto community is in wait and see mode, waiting for the calendar to tick down to the 60 days and witness very closely what unfolds. Ripple’s future, and the future of digital assets in the United States at large, are both on the line for the SEC’s next move.