Ex-SEC Official Predicts Ripple Appeal Withdrawal Is Inevitable

Former SEC officer John Reed Stark claims that the agency is getting ready to withdraw from its legal battle with Ripple. According to Stark, who oversaw the SEC’s Office of Internet Enforcement for eleven years, the agency will withdraw its appeal, which would represent a dramatic change in the way that cryptocurrency is regulated.

A Turning Point in SEC’s Crypto Strategy

Stark shared his views on social media platform X, asserting, “In my opinion, the SEC will never again file a pleading in a court case advocating that any digital asset is a security. That is the reason why a withdrawal of the SEC’s Ripple appeal is inevitable.”

He also stated, “I also believe that the SEC will win the Ripple appeal, and such a victory would be wholly inconsistent with its current crypto–ethos.” This suggests that while the SEC may have a strong legal case, it might lack the motivation to continue its battle with Ripple.

Beyond Ripple, Stark pointed to broader shifts in the SEC’s enforcement approach. He noted that cases against Uniswap and OpenSea were recently closed, indicating a less aggressive stance toward digital assets. If the SEC follows through on withdrawing the Ripple appeal, it could signal a major shift in how U.S. regulators engage with crypto firms.

In another post on X, Stark remarked, “So this is how the SEC dies. The rapid-fire demolition of the SEC crypto-enforcement program continues. SEC investigations of Uniswap & Opensea officially closed. Both firms had received wells notices under SEC Chair [Gary] Gensler.” He further added, “Dropping of the SEC’s Ripple appeal next up for sure.”

Stark’s arguments are supported by recent SEC rulings. The action against Coinbase, which was accused of functioning as an unlicensed securities exchange, was recently dropped by the agency. Furthermore, without pursuing enforcement action, the SEC concluded its inquiry into Robinhood’s cryptocurrency business. These actions point to a change in regulations under the current administration, which could encourage innovation in the cryptocurrency industry by lessening legal constraints.

Ripple’s success might signal a more significant shift in the SEC’s enforcement of crypto laws, changing the regulatory environment of the sector if Stark’s forecasts come to pass.