Ripple Labs has filed a cross-appeal in the U.S. Court of Appeals for the Second Circuit, contesting several elements of a key ruling in its legal battle with the Securities and Exchange Commission.
The move comes a week after the SEC submitted its own appeal, targeting specific aspects of a 2023 court decision that partially favored Ripple in its sale of XRP to investors.
The appeals process, which is expected to continue well into next year, has already drawn significant attention due to its potential impact on the regulation of digital assets in the U.S.
SEC Files Last-Minute Appeal in Ripple Case—Why the XRP Army is Outraged
The U.S. Securities and Exchange Commission has filed a last-minute appeal in its ongoing legal sparring with Ripple Labs, seeking to reverse parts of a summary judgment delivered by U.S. District Judge Analisa Torres more than a year ago. Torres’ July 2023 ruling partially favored Ripple by concluding that the company’s sales of XRP to retail investors on digital asset platforms did not violate U.S. securities laws. The court found that these transactions did not meet the legal criteria for an...
"The Appeals Court reviews the record that has already been set and we have a great record," Stuart Alderoty, Ripple's chief legal officer, said in a Thursday statement on X.
"The SEC can’t submit new evidence or ask us to produce more. Meaning, there won’t be all the drama we had in the litigation when we fought over documents," he added.
Ripple’s filing, dated Thursday, outlines four critical issues that the company plans to address.
Central to the firm's appeal is the argument its institutional XRP sales should not have been classified as unregistered securities offerings, which resulted in a $125 million fine.
Ripple contends that the U.S. Southern District Court of New York, under Judge Analisa Torres, misapplied the definition of an "investment contract" in relation to the 1933 Securities Act.
Ripple Legal Chief Says SEC Appeal Will 'Backfire'—And Benefit the Crypto Industry
As the Securities and Exchange Commission (SEC) prepares to appeal a federal judge's decision involving XRP, the agency is setting itself up for yet another high-profile failure, according to Ripple Labs’ Chief Legal Officer, Stuart Alderoty. “It will backfire on the SEC,” he told Decrypt in an interview. “I felt good about our case in the Southern District of New York. I feel even better about our case in the Second Circuit.” When the SEC first hit Ripple and two of its executives with a lawsui...
Specifically, the company disputes the requirement that such a contract must impose post-sale obligations on the seller and give buyers a right to profit from the seller’s efforts.
Additionally, Ripple argues that the court overlooked the broader regulatory uncertainty surrounding how securities laws apply to crypto.
The company claims the SEC failed to provide fair notice that XRP's sale would violate these laws, raising a significant legal question about the application of securities regulations to digital assets.
XRP Pumps and Then Falls on SEC vs. Ripple Settlement Speculation
XRP surged by almost 40% to $0.64 earlier this week amid widespread speculation that Ripple Labs was nearing a settlement agreement with the U.S. Securities and Exchange Commission—though it has since fallen back to $0.56 after regulators gave notice that a closed-door meeting was canceled. The rally early in the week, which briefly made XRP the sixth-largest cryptocurrency globally by market capitalization, appears to have been driven by investor speculation that a non-public SEC meeting was re...
The regulator, meanwhile, is appealing the dismissal of charges related to Ripple’s programmatic XRP sales on digital exchanges and its distributions to employees, which it claims violated those laws.
The regulator is focusing on whether Ripple’s executives, Brad Garlinghouse and Chris Larsen, violated securities laws by offering what it deems as unregistered sales.
Notably, the SEC has not challenged the district court’s finding that XRP itself is not a security, a ruling that remains a significant victory for Ripple.
