Ripple’s Ongoing Legal Battle with the SEC: Recent Developments
Ripple has responded to the latest move from the U.S. Securities and Exchange Commission (SEC), asserting that the recent appeal filing does not introduce any unexpected elements into their ongoing legal struggle.
Overview of the SEC’s Appeal
On October 17, the SEC escalated its appeal against certain parts of Judge Analisa Torres’s decision regarding Ripple, by filing a comprehensive statement with the U.S. Court of Appeals for the Second Circuit.
Judge Torres previously ruled in favor of Ripple, stating that the company’s XRP sales to retail investors via digital asset exchanges did not breach U.S. securities laws. However, sales targeted at institutional investors were deemed to violate these regulations.
Key Points of the SEC’s Appeal
The SEC’s filing clarifies that the agency is not disputing the previous ruling that favored Ripple concerning retail investor sales. Instead, the focus is on several other significant aspects of the court’s decision.
- The SEC aims to challenge Ripple’s programmatic sales of XRP through digital trading platforms.
- It plans on contesting XRP distributions to employees and various associated parties.
- The regulator is also pursuing Ripple executives, Brad Garlinghouse and Chris Larsen, under allegations of facilitating XRP sales on digital platforms.
The SEC has further requested that the appellate court evaluate these issues “de novo,” meaning the court would reassess the legal questions without relying on the trial court’s conclusions. The filing stated:
“Whether the district court erroneously granted partial summary judgment in favor of defendants with respect to Ripple’s offers and sales of XRP on digital asset trading platforms…”
Interestingly, the SEC’s filing does not indicate any plans to appeal the imposed $125 million penalty or challenge the court’s refusal to order disgorgement.
Community Engagement and Speculations
The SEC’s decision to appeal has stirred considerable discussion within the community, with speculations surrounding the appeal’s implications and timing. This filing came shortly after the SEC initially communicated its intent to contest the ruling, despite potential delays.
Response from Ripple
In light of the SEC’s appeal, Ripple’s Chief Legal Officer, Stuart Alderoty, reiterated that the court’s ruling affirming that XRP is not classified as a security remains intact and unchallenged.
He responded:
“No surprises here — once again it’s been made clear. The Court’s ruling that ‘XRP is not a security’ is NOT being appealed. That decision stands as the law of the land.”
Alderoty added that Ripple intends to file its own cross-appeal in the coming week.
