In a significant development, Ripple announced on October 10, 2024, that it filed a cross-appeal with the U.S. Court of Appeals regarding its legal battle with the U.S. Securities and Exchange Commission (SEC).
Ripple Chief Legal Officer (CLO) Stuart Alderoty shared the news on X. This is a response to the SEC’s recent notice of appeal filed on October 3, challenging Judge Annalisa Torres’ August 7 ruling.
The legal dispute, which began in December 2020, has negatively impacted Ripple’s growth and XRP’s adoption on a global scale. The court issued the final ruling on August 7, and many in the community were excited that XRP’s newfound freedom would let it soar to new heights. This was not the case, as the SEC filed a notice of appeal less than a month later.
XRP’s Security Status
The case is to determine whether XRP constitutes a security under U.S. law. Judge Torres ruled in July 2023 that XRP tokens sold on secondary markets did not violate securities regulations and that XRP itself was not a security. However, she found that Ripple had violated securities laws in its sales to institutional clients, resulting in a $125 million penalty for the company.
The SEC’s decision to appeal has sparked speculation within the cryptocurrency community because the regulator did not specify what ruling it intends to challenge. The SEC’s notice of appeal does not contain any other details, and the community will have to wait for further filings to get more information.
Although some believe the SEC will challenge XRP’s security status and the ruling from July 2023, other experts have expressed confidence that the digital asset’s non-security status is safe.
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Ripple Stands Firm Against the SEC
Alderoty expressed skepticism regarding the SEC’s appeal. In a public statement, Alderoty asserted that the SEC’s motivation stems from its defeat on key points of the case. He emphasized that Ripple’s cross-appeal aims to address any remaining issues comprehensively, ensuring that, “nothing is left on the table.”
Alderoty also highlighted apparent inconsistencies in the SEC’s approach, noting their previous indications that they would not contest the ruling on XRP’s non-security status. He further pointed out the SEC’s unsuccessful attempts, “We look forward to the federal court of appeals finally putting a stake in the heart of Gensler’s misguided attack on our industry.”
This latest development extends a legal process that many, including Ripple CEO Brad Garlinghouse, had hoped was nearing conclusion. However, Garlinghouse has affirmed his commitment to fight the lawsuit to the end.
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