Key Points
- SEC’s appeal in the Ripple case has delayed Bitwise’s XRP ETF.
- Ripple’s non-security status is back under scrutiny with the SEC’s move.
- Bitwise’s XRP ETF approval faces indefinite delays amid the legal battle.
- The future of XRP and the market depends on a prolonged court case.
The SEC Ripple appeal has sent ripples across the crypto world, putting on hold the approval of Bitwise’s highly anticipated XRP ETF.
As the SEC challenges the recent court ruling in favor of Ripple, the legal status of XRP as a non-security is now under renewed scrutiny. This development threatens Ripple’s standing and the future of XRP-based financial products like the proposed Bitwise ETF.
SEC files appeal in Ripple case, putting XRP ETF on hold pic.twitter.com/pJlqh4PVyW
— Crypto Briefing (@Crypto_Briefing) October 2, 2024
Ripple’s Victory Short-Lived as SEC Ripple Appeal Escalates
In August 2024, Ripple Labs secured a significant victory when a court ruled that XRP could be traded without being classified as a security.
This ruling was seen as a major win for the entire cryptocurrency industry, particularly for Ripple, whose executives—Bradley Garlinghouse and Christian Larsen—had been embroiled in a legal battle with the SEC for years.
However, the SEC Ripple appeal has thrown that victory into jeopardy. The SEC officially filed the appeal just days before the deadline, questioning the court’s ruling and signaling that the battle over XRP’s classification is far from over.
Legal analysts predict that this appeal could prolong the Ripple case well into 2025, leaving the future of XRP hanging in the balance.
This renewed legal uncertainty is a significant setback for Ripple and the broader crypto market. Ripple’s ability to operate without the shadow of SEC scrutiny has been temporarily halted, and the status of XRP as a non-security is once again up for debate.
XRP ETF Plans Paused Amid SEC Ripple Appeal
The SEC Ripple appeal also impacts Bitwise, a leading crypto investment firm that filed for the first-ever spot XRP ETF in late September 2024.
This ETF was seen as a game-changer for investors looking for regulated exposure to XRP, but the SEC’s legal move has put those plans on ice. With the appeal in place, the approval process for the ETF is expected to face indefinite delays.
Alex Thorn, Head of Research at Galaxy Digital, had earlier predicted that an SEC appeal would reduce the chances of the XRP ETF’s approval to “near zero.” With the SEC now actively pursuing the appeal, Thorn’s forecast appears to be on point.
The delay in ETF approval comes at a critical time when institutional investors are increasingly eyeing crypto-based financial products, but regulatory hurdles like the SEC Ripple appeal are slowing down market progress.
Until there is a final ruling from the U.S. Court of Appeals for the Second Circuit, the status of XRP remains uncertain, and so too does the fate of any financial products tied to it, like the Bitwise ETF.
The SEC Ripple appeal underscores how regulatory moves can create market instability and hold back innovations that would otherwise provide new opportunities for both institutional and retail investors.
Ripple’s Future Hinges on the Outcome of SEC Ripple Appeal
Ripple’s legal battle with the SEC has become one of the most significant cases in the history of cryptocurrency regulation. The SEC Ripple appeal represents the latest twist in a saga that has already had far-reaching implications for the crypto industry.
Should the SEC succeed in overturning the previous court ruling, XRP could be reclassified as a security, subjecting Ripple and its operations to stricter regulations.
This outcome could set a powerful precedent for how other cryptocurrencies are treated under U.S. law. For now, both the SEC and Ripple are preparing for what could be a lengthy court battle, with the stakes higher than ever for the future of XRP.
The uncertainty caused by the SEC Ripple appeal makes it unlikely that the Bitwise XRP ETF or similar crypto-based financial products will gain approval until a clear regulatory framework is established.
As the case drags on, the crypto world will be closely watching for any signals that might indicate which way the courts are leaning.
