SEC Appeals Partial Judgment in Ripple Case

SEC Appeals Partial Judgment in Ripple Case

SEC Appeals Partial Judgment in Ripple Case

The U.S. Securities and Exchange Commission (SEC) has filed an appeal at the last minute in its legal battle with blockchain development company Ripple Labs, seeking to overturn a partial summary judgment made by U.S. District Judge Analisa Torres over a year ago.

Judge Torres’ ruling in July 2023 was partially favorable to Ripple, determining that the company’s sales of XRP, a digital asset, to retail investors on its digital asset platform did not violate U.S. securities laws. The court found that these transactions did not meet the legal standards of an investment contract, which dealt a blow to the SEC’s broader efforts to regulate cryptocurrency sales under existing securities regulations. Additionally, the judge imposed a fine of approximately $125 million on Ripple after finding that 1,278 of its institutional sales transactions violated securities laws.

In the appeal submitted to the U.S. Court of Appeals for the Second Circuit on Thursday evening, the SEC did not contest the aforementioned ruling. Instead, the agency focused on challenging the part of the ruling that deemed Ripple’s issuance and sale of XRP on digital asset trading platforms, as well as the personal sales activities of Ripple executives Bradley Garlinghouse and Christian Larsen, as not constituting illegal behavior. The SEC also disagreed with the ruling that distributing XRP by Ripple for non-cash consideration did not violate securities laws.

Ripple’s General Counsel, Stuart Alderoty, responded to the SEC’s filing on Thursday on the community platform X, stating, “This comes as no surprise – as we’ve said all along, the court’s ruling that XRP is not a security remains the law of the land. That decision stands unchallenged, and that’s a fact.” Alderoty also mentioned that the company plans to submit their Form C next week.

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