Ripple’s XRP Legal Status Intact as SEC Focuses on Executive Sales in Appeal

• The SEC’s appeal does not target XRP’s legal status, ensuring the cryptocurrency is not considered a security.
• Ripple executives Brad Garlinghouse and Chris Larsen face renewed scrutiny over personal XRP sales and distributions.
• Ripple’s chances of success in the appeal remain strong, with legal experts predicting a 90% chance of victory.

In its ongoing case against Ripple, the U.S. Securities and Exchange Commission (SEC) confirmed it will not challenge the legal status of XRP as part of its appeal. According to a pre-argument statement, the regulator’s focus remains on Ripple’s sales and distribution of XRP, along with alleged violations by company executives. This follows the court’s earlier ruling, which found XRP is not a security.

SEC’s Focus Shifts to Ripple’s Sales of XRP

The SEC’s appeal targets Ripple’s sales of XRP on various trading platforms, as well as the use of XRP as a method of payment. Ripple’s Chief Legal Officer, Stuart Alderoty, reaffirmed that the court’s decision declaring XRP not a security remains “the law of the land.” Consequently, XRP holders have welcomed this development, as it alleviates concerns about the cryptocurrency’s regulatory status.

Besides targeting Ripple’s business practices, the SEC has also revived its case against Ripple’s CEO Brad Garlinghouse, and co-founder Chris Larsen. The agency claims both individuals played a significant role in the sale and distribution of XRP. Additionally, the SEC’s appeal will scrutinize personal sales made by the executives, as well as the allocation of XRP to employees. Ripple executives have consistently denied any wrongdoing.

SEC Avoids Appeal on Monetary Penalty

However, the SEC did not appeal the $125 million monetary penalty imposed on Ripple. Interestingly, the regulator chose not to pursue the $0 ruling on disgorgement, which would have involved returning funds from Ripple’s XRP sales. Legal experts, including attorney Fred Rispoli, suggest that the SEC may have abandoned this argument because it saw it as weak.

Significantly, legal experts view Ripple’s chances of success in the appeal as highly favorable. Jeremy Hogan, a legal commentator, estimates that Ripple has a 90% chance of winning at least one of the major issues. Moreover, Hogan believes the company’s overall odds of prevailing on both issues are strong, depending on the judges assigned to the case. As the appeal process unfolds, Ripple appears well-positioned to defend itself.