Second Circuit suspends Ripple appeal for consultation with SEC

In a critical development in the long-term legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, the U.S. Court of Appeals in the Second Circuit granted a joint motion Wednesday to suspend appeals in their case.

This decision allows the parties to focus on finalizing a settlement agreement that could end a multi-year dispute. As part of the court order, the SEC must submit a status report within 60 days by June 9th and update the court regarding the progress of the settlement consultation.

Why is suspending the appeal a positive step in a settlement?

As this pause is known, placing the appeal on “abeyance” marks a hopeful turn. Both the SEC and Ripple are negotiating a principles agreement, demonstrating the potential solution to the legal uncertainty that has plagued Ripple and its cryptocurrency XRP.

Appeals remained a major hurdle, but now both sides seem poised to work past the lawsuit and to resolve the issue. The suspension of appeals gives them the space needed to finalize the details of the settlement without pressure from the ongoing court proceedings.

Related: SEC action across Binance, Ripple suggests a tuned resolution push

A court order signed by Circuit Judge Jose Cabrans on April 16th ensures that the SEC is liable. By mandating progress updates in two months, the court ensures that settlement consultations are moving forward.

Will the new SEC Chair Paul Atkins be able to affect the outcome?

A key factor in this potential settlement is the recent confirmation of Paul Atkins as the new SEC chair. Atkins is generally seen as having a more practical attitude towards cryptography than his predecessor, but may play a role in leading the agency towards approval.

Since his confirmation on April 9th, speculation has grown that the SEC may be ready to finally move on from the lawsuit. However, internal approval is still necessary, and a vote by the SEC committee members will determine whether the settlement is formal.

Once the contract is approved, the parties are expected to request that the appeal be rejected. They may also seek court approval to amend or clarify some of the original district court decisions by Judge Torres.

What does this mean for XRP investors and ETF hopes?

Crypto analyst John Squire believes in a major change in the market for suspending appeals and potential settlement signals. He notes that institutional investors have already positioned themselves in anticipation of XRP’s more favorable regulatory environment.

Related: Ripple vs. SEC: Endgame is nearby. Can this mark the final chapter?

Additionally, the potential of the XRP Exchange-Traded Fund (ETF) has attracted attention as several companies, such as Bitise, Grayscale and Proshares, have already submitted applications. The settlement could accelerate this process and drive XRP to new heights in the crypto market.