In a detailed thread on X (formerly Twitter), legal analyst James Farrell has provided a comprehensive breakdown of what’s next in the high-profile legal battle between Ripple (XRP) and the U.S. Securities and Exchange Commission (SEC).
According to Farrell, the case is likely months, not days, away from being resolved and depends on several key procedural steps and strategic decisions.
Currently, the U.S. Court of Appeals for the Second Circuit has halted the appeal process, leaving the case in limbo. Farrell explains that two key components are currently under consideration by the full SEC Commission:
- A possible settlement offer from Ripple and
- Request for an indicative decision from Judge Analisa Torres.
What is an Indicative Decision and Why is it Important?
Farrell explains that this will include Judge Torres signaling whether he will modify his current decision to allow Ripple to conduct a private sale of unregistered securities using exemptions not normally available to companies found to have violated securities laws.
This is a big deal for Ripple. Without such a change, Farrell argues, the company’s chances of launching an IPO in the next few years are “basically zero.” As other crypto firms pursue IPOs, Ripple could remain on the sidelines.
If Ripple were to submit a settlement proposal, the full SEC would need to vote on it, a process that has no set timetable as of recent court filings. A key unknown is whether the SEC will consider the settlement and indicative ruling as a combined proposal or as two separate matters.
If considered separately and the SEC only approves the settlement, Ripple would have to seek a modification of the injunction after the appeal is denied, which would pose a significant risk. In this scenario, Judge Torres could deny the request and leave Ripple with a settlement, but it would still be restricted from private securities sales for up to three years.
Timeline estimate:
- One month for SEC approval
- Judge Torres will be given an additional 3-6 months to rule on the request for a change.
In a second scenario, in which the SEC treats both the settlement and the preliminary ruling as a package deal, the timeline would be even longer. If the SEC rejects one section, the appeals process would continue, likely pushing oral arguments to January 2026 with a possible ruling in August 2026.
If both sections are approved, Ripple and the SEC will then file for an indicative ruling. The pace of this process can vary, with previous rulings in similar contexts taking anywhere from three weeks to six months.
Judge Torres will have three options in this case:
- Postpone the decision
- Reject the move
- Stating that if the appeals court reconsiders the case, it will accept the request
If he chooses the third option, the case would return to the appeals court briefly before going back to Torres for a formal decision, potentially leading to a modified preliminary injunction and a voluntary dismissal of the appeal.
Farrell warns against a “surprise development” scenario: Judge Torres may initially signal that he will grant the request, but then change his mind upon further review and send the case back to the appeals court for further proceedings.
Farrell believes the Ripple-SEC lawsuit is far from over. Whether it’s through a negotiated settlement or ongoing litigation, resolution is likely to take months or even years, with 2026 and 2027 being realistic targets for final clarity if a settlement isn’t reached soon.
*Not investment advice.
