The U.S. Securities and Exchange Commission (SEC) has announced plans to appeal a federal court ruling in its long-standing legal dispute against Ripple Labs and its digital asset, XRP.
On October 2, the SEC filed its notice of appeal with the Second Circuit Court of Appeals. This move follows an August court ruling that delivered a mixed verdict in the regulator’s high-profile case against Ripple.
Ripple Leadership Criticizes the SEC’s Decision
Ripple’s CEO, Brad Garlinghouse, and Chief Legal Officer, Stuart Alderoty, expressed disappointment with the SEC’s decision to appeal, reaffirming their commitment to fight the case in court.
Background of the SEC Lawsuit
The SEC initially sued Ripple in December 2020, accusing the company of conducting an unregistered securities offering through XRP sales worth $1.3 billion. The SEC contends that the court’s ruling contradicts established Supreme Court precedent regarding securities.
Mixed Ruling in Ripple’s Favor
Ripple celebrated parts of the court’s decision as a victory for the broader crypto industry. U.S. District Judge Analisa Torres ruled that programmatic XRP sales to retail investors via crypto exchanges did not violate securities laws. However, the court determined that direct XRP sales to institutional investors, totaling $728 million, did constitute unregistered securities transactions, leading to a $125 million penalty for Ripple.
Although the SEC initially sought a $2 billion fine, the lower penalty was considered a win for Ripple. Nevertheless, the case remains unresolved, and the SEC’s appeal has brought it back into focus.
Impact on XRP Value
Following the SEC’s appeal, XRP saw a significant decline in value, dropping by about 9% in the past day to trade just above $0.54, according to CryptoSlate data.
Ripple Execs Push Back Against SEC
Garlinghouse voiced frustration over the SEC’s decision to continue its legal battle, accusing the agency of wasting taxpayer money. He emphasized that key issues in the case had already been decided in Ripple’s favor, criticizing SEC Chair Gary Gensler’s leadership. According to Garlinghouse, XRP’s non-security status remains unchanged, despite the SEC’s appeal.
Garlinghouse further criticized the SEC’s lack of accountability, asserting that the agency faces no consequences for prolonging what he sees as a losing case. He reiterated that Ripple, the crypto industry, and the rule of law have already prevailed.
Ripple’s Cross Appeal Consideration
Alderoty echoed Garlinghouse’s sentiments, emphasizing that the court found no victims or losses in the case. He criticized the SEC for continuing its “litigation warfare” against the crypto industry and mentioned that Ripple is considering filing a cross appeal.
The post Ripple execs slam SEC decision to appeal XRP ruling appeared first on CryptoSlate.
