- The SEC has filed an appeal against the court’s decision, challenging XRP’s non-security classification and Ripple’s $125M penalty.
- Ripple CEO opposes the SEC’s appeal, reaffirming confidence in the earlier ruling that XRP is not a security for public sales.
- The SEC’s appeal may delay Ripple’s progress and affect approval of a Spot XRP ETF filed by Bitwise amid ongoing legal challenges.
The U.S. Securities and Exchange Commission (SEC) has officially filed an appeal against the U.S. Second Circuit Court’s ruling on Ripple Labs. This follows the earlier court decision that XRP, Ripple’s token, is not classified as a security.
The SEC argues that the ruling contradicts decades of Supreme Court precedents and securities laws. Notably, Ripple’s $125 million penalty falls far short of the SEC’s initial demand for $2 billion in fines. Despite this, Ripple maintains that the decision was favorable for the broader crypto market.
Ripple’s Legal Battle and SEC’s Notice of Appeal
Ripple has been in a legal dispute with the SEC since 2020, with the regulator claiming that the firm’s sale of XRP violated securities regulations. According to the SEC, Ripple raised over $1.3 billion through unregistered securities sales.
In July 2023, Judge Analisa Torres ruled that while Ripple’s sales of XRP to institutional investors did violate securities laws, its programmatic sales to the general public did not. This partial victory for Ripple prompted the SEC to file an official notice of appeal, signaling its intention to challenge the ruling.
Ripple CEO Brad Garlinghouse voiced strong opposition to the SEC’s move, expressing confidence that the initial decision would stand. His comments suggested that Ripple sees the appeal as both misguided and unnecessary. However, with the appeal now in motion, the case is set to continue, potentially prolonging the legal battle between the SEC and Ripple.
Impact on XRP and Potential Delays
The SEC’s appeal could have substantial implications for Ripple and the wider crypto market. Investors have expressed concerns that the appeal might hinder Ripple’s progress, particularly as the company focuses on defending its case.
Additionally, the appeal came hours after Bitwise filed for a Spot XRP ETF, raising further uncertainty about Ripple’s future. The ongoing legal challenges could potentially delay new developments, including the ETF’s approval.
Ripple’s Response and Next Steps
Despite the SEC’s appeal, Ripple has not indicated any plans to contest the civil penalties imposed in August. The firm has consistently maintained that XRP’s status as a non-security is firmly established.
However, the SEC’s latest legal move seeks to overturn key aspects of the court’s earlier decision, focusing on the programmatic sales of XRP. The federal regulator has yet to formally submit its full appeal, though the notice indicates that Ripple’s legal battle is not over.
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