• SEC appeals XRP case ruling, challenging decisions on non-institutional and executive sales of Ripple’s token.
  • Ripple to counter SEC’s appeal, aiming to defend court ruling that favored its digital asset transactions.
  • Legal battle between SEC and Ripple extended, with implications for future digital asset regulations looming.

The United States Securities and Exchange Commission has filed an appeal in its ongoing case against Ripple Labs. The appeal follows the July 2023 ruling by Judge Analisa Torres of the US District Court for the Southern District of New York. 

She ruled that it’s institutional sales of XRP were unregistered securities offerings. However, she also determined that Ripple’s sales of XRP on digital asset trading platforms and by executives did not qualify as securities transactions. This mixed verdict created uncertainty over the case’s outcome.

The U.S. SEC has filed a last-minute Form C appeal in its ongoing legal battle with #Ripple . The appeal challenges Judge Analisa Torres' 2023 ruling, which favored Ripple by declaring most XRP sales were not securities transactions. Specifically, the SEC's appeal targets Ripple’s… pic.twitter.com/4GUB1lH6N4

— PINK CAT (@pinkcatgroup) October 18, 2024

Ripple Ruling Details and SEC’s Appeal

Judge Torres ruled in July that institutional XRP sales violated securities laws. She imposed a $125 million fine on the company for these actions, which was significantly less than the SEC’s initial demand of nearly $2 billion. 

The court also decided that distributions of XRP for employee compensation and its Xpring initiative were not securities, granting Ripple a partial victory. Despite these outcomes, the SEC aims to overturn the decision that favored Ripple, particularly regarding digital asset platform sales.

The appeal, filed through a Civil Appeal Pre-Argument Statement (Form C), signifies the SEC’s intent to challenge the court’s summary judgment. The regulator seeks to review and potentially reverse the ruling that non-institutional sales and executive transactions were not securities. This move suggests the SEC is doubling down on its efforts to impose stricter regulatory measures on XRP.

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Implications and Next Steps

With this appeal, the SEC’s legal battle with may extend until early 2026, further delaying resolution. Ripple is expected to file its own Form C, as it previously submitted a cross-appeal notice . This will provide Ripple an opportunity to counter the SEC’s claims and possibly challenge the regulator’s approach.

Experts remain divided on the outcome of this appeal. If the SEC is successful, Ripple may be subject to more fines or limitations. Nevertheless, Ripple’s Chief Legal Officer Stuart Alderoty has stated that the company’s cross-appeal is intended to oppose the SEC’s regulatory strategies. 

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