The XRP lawsuit between Ripple Labs Inc. and the US Securities and Exchange Commission has entered a new, slower‑moving phase after the United States Court of Appeals for the Second Circuit agreed on Wednesday to freeze the briefing calendar in the pending interlocutory appeal. The stay, granted on a joint request from both sides, requires the SEC to file a status report within 60 days, but otherwise suspends all appellate deadlines.
What’s Next In The XRP Lawsuit?
James Farrell, general counsel of the digital‑asset investment firm JST Digital, dissected the order in a thread on X that quickly became required reading for market participants trying to divine the litigation’s next steps. “Right now, the 2d Cir has held the appeal schedule in abeyance (basically frozen),” Farrell wrote, adding that observers should be “measuring this in months and not days.”
According to Farrell, the stay rests on a pair of decisions now sitting before the SEC’s five‑member Commission. “It appears,” he said, “that there are two parts up for approval of the full Commission: (1) settlement of the case and (2) seeking an indicative ruling by Judge Torres.” The indicative‑ruling request would ask US District Judge Analisa Torres—who in July 2023 issued the injunction Ripple now operates under—to state whether she would entertain modifying that injunction to let Ripple conduct private placements of XRP under standard exemptions despite its prior violation of the securities laws.
Without such relief, Farrell noted, “the possibility of an IPO in the next 3+ years is basically zero. So while the ‘cool kids’ are going public, Ripple practically cannot.” The company therefore needs both the settlement and the judge’s signal to regain the corporate flexibility normal issuers enjoy.
Farrell sketched two broad procedural paths. If the Commission treats the settlement and the indicative‑ruling motion as independent votes, it could accept the deal but refuse to seek Judge Torres’s guidance. In that circumstance, the parties would dismiss the appeal quickly, but Ripple would still have to file a post‑settlement motion before Torres to alter her injunction. “If Torres says no,” Farrell warned, “Ripple has its settlement but sits on the beach for three years as a private company.” He estimated roughly a month for Commission approval and dismissal of the appeal, followed by another three to six months for Judge Torres to rule.
More Complex Scenarios
The more complex scenario is that the Commission links the two requests. Should the agency approve only one part, it would notify the Second Circuit that the stay should be lifted, setting the litigation back on track. Farrell projected oral argument in that revived appeal for January 2026 and a decision by August 2026.
If, however, the SEC green‑lights both the settlement and the indicative‑ruling motion, the parties would immediately petition Judge Torres. Here the timing becomes unpredictable. Farrell pointed to a six‑month turnaround in Litovich for a comparable motion, whereas Judge Parker resolved a similar request in Avilez in just three weeks.
Judge Torres would have three options: defer consideration, deny outright, or state that she would grant the motion—or that it “raises a substantial issue”—if the Second Circuit remands the case. A deferral or denial would return the matter to the appellate docket, pushing oral argument to mid‑2026 and a decision to early 2027. A positive signal, by contrast, would prompt a brief two‑week remand, after which the district court could amend its injunction and send the matter back up for voluntary dismissal.
Farrell also flagged a potential “monkey wrench”: even after indicating she would grant relief, Judge Torres could change her mind when the case landed back on her desk, forcing the parties to resume litigating in the Second Circuit.
Because the order requires the SEC to report within 60 days, the first meaningful public milestone falls in mid‑June. Until then, the appellate docket is frozen and Ripple’s path out of regulatory limbo hangs on two questions only the SEC’s commissioners—and, eventually, Judge Torres—can answer. Farrell’s bottom‑line assessment was blunt: the market should settle in for a timeframe measured “in months and not days.”
At press time, XRP traded at $2.09.
