Former SEC Lawyer Debunks Settlement Rumors, Labels Them ‘Fake News’

Speculation is growing among users on X regarding a potential settlement in the ongoing SEC vs. Ripple case, which could clarify the security status of XRP. Despite ongoing legal challenges, XRP’s price has remained relatively stable around 52 cents, though it has dropped by about 17% this month. 

Recent reports have hinted that a U.S. court has encouraged Ripple and the SEC to explore “alternative resolutions.” Judge Hamilton’s comments have fueled optimism about a possible settlement. However, former SEC lawyer Marc Fagel has dismissed these reports as misleading, labeling them as “fake news” from automated accounts.

Fagel clarified that the document referenced by users pertains to an investor class action lawsuit pending in California, which is entirely separate from the SEC’s case against Ripple, currently under appeal in the Second Circuit.

Recently, Ripple Labs filed a response in the Second Circuit Court of Appeals, detailing the points it plans to raise in its appeal. Ripple’s chief legal officer, Stuart Alderoty, stated that the SEC cannot introduce new evidence at this stage and criticized the SEC for creating confusion. The next steps in the appeals process may not come until January 2025 due to the SEC’s request for more time.

Ripple’s appeal aims to clarify important legal questions about what constitutes an investment contract under the Securities Act of 1933. Ripple argues that certain sales should not be classified as securities and questions previous court findings about its XRP sales.

The payment company also brought to attention the inconsistencies in SEC regulations that make compliance difficult.. Additionally, Ripple is asking the court to clarify what it must do to comply with a previous injunction aimed at preventing future violations of securities laws.