The battle between the Securities and Exchange Commission (SEC) and Ripple Labs over the regulatory status of XRP has taken another intriguing twist. Last week, the SEC made a Hail Mary interlocutory appeal to challenge a previous court decision allowing Ripple to use a “fair notice” defense. However, leading legal experts are vehemently opposing this move, predicting its inevitable rejection.

Both Ripple’s chief counsel, James K. Filan, and Coinbase Chief Legal Officer Paul Grewal have publicly called the SEC’s bluff. They argue that stringent standards for an interlocutory appeal must be met, which include proving that waiting for a final verdict would cause “irreparable harm.” According to Filan, the agency has yet to demonstrate the existence of such harm.

Taking to Twitter, Filan forecasted a swift rejection, stating, “There are strong legal reasons why the Court of Appeals should deny the SEC’s motion.” Grewal also agreed that the appeal holds “no merit” and fails to meet the statutory requirements.

Should the appeal be denied, the battle between the SEC and Ripple will progress to summary judgment. This stage involves the court carefully reviewing evidence and arguments before deciding whether to proceed with a full trial. The origins of this ongoing conflict can be traced back to 2020 when the SEC filed a lawsuit accusing Ripple of violating securities laws through the sale of over $1.3 billion worth of XRP without proper registration and disclosures. Additionally, the regulator contended that XRP should be considered more as an investment rather than a currency.

The outcome of this case holds significant implications for the wider cryptocurrency industry. Ripple passionately maintains that XRP functions as a currency, not a security, and argues that the SEC should have offered fair notice regarding its regulatory status. Experts believe that the final judgment in this case could shape future regulations for not only XRP, but also for cryptocurrencies such as Bitcoin and Ethereum.

Both the SEC and Ripple are dedicating substantial resources to this legal clash, and the recent appeal demonstrates the agency’s intent to weaken Ripple’s defense prior to trial. However, Filan and Grewal’s confident predictions cast doubts on the SEC’s prospects, indicating that the agency may soon have to face Ripple’s arguments head-on.

For crypto companies eagerly seeking clarity on XRP’s future legal standing, as well as broader questions regarding coin regulations, the outcome of this case carries immense significance. While the appeal rejection would provide Ripple with renewed confidence, some regulatory uncertainty may still persist until the SEC proves its case against Ripple’s defenses. Thus, the legal rollercoaster continues, leaving the SEC’s strategy open to scrutiny by vocal critics.

In the end, as Ripple and Coinbase express unwavering confidence in the appeal’s imminent failure, the SEC finds itself on the receiving end of a dramatic bluff being called.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.