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- The US Securities and Exchange Commission (SEC) has officially decided to appeal Judge Analisa Torres’ ruling on the programmatic sales of Ripple’s XRP.
- According to Ripple CEO Brad Garlinghouse, the SEC’s decision is “irrational” and does not protect investors.
The US Securities and Exchange Commission (SEC) has filed a notice of appeal to the July 2023 ruling “that restricted its ability to regulate the crypto market.” Fascinatingly, this comes after CNF recently reported that a former SEC lawyer firmly believes that the Commission would not give up easily.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: The @SECGov has filed a Notice of Appeal of Judge Torres’s Ruling. pic.twitter.com/j8bLIZQ5LT— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 2, 2024
Following this announcement, XRP has taken a significant downturn to fall by 10% in the last 24 hours and is trading at the $0.53 support level.
On July 13, 2023, US District Court Judge Analisa Torres ruled that XRP was not a security when sold to retail investors via digital asset exchanges. However, she clarified that the sale of the asset to institutional investors flouted federal securities laws. According to the details derived from the previous court statements, the judgment was based on the Supreme Court’s Howey test, which sets the standard for an investment contract.
Earlier this year, the SEC sought a fine totaling $2 billion in the case against Ripple. However, the blockchain company countered the proposal with $10 million. In August, the court ordered Ripple Labs to pay the Commission an amount of $125 million. As we reported earlier, both parties later agreed on a stay of the monetary portion of the court judgment entered on August 7. According to the details, Ripple agreed that 111% of the monetary judgment would be held in a trust and would be paid to the Commission 30 days after the appeal deadline.
Following this development, lawyer Fred Rispoli disclosed that the chance of appeal had significantly increased. Similarly, Ripple’s Chief Legal Officer (CLO) Stuart Alderoty stated that the SEC could file an appeal; however, the legal status of the XRP token would remain intact.
Ripple Executives React
Responding to this development, Ripple CEO Brad Garlinghouse has branded SEC chair Gary Gensler and the Commission as “irrational.” According to him, the Commission’s decisions have not protected investors. Instead, they have dented the institution’s credibility and reputation. Garlinghouse further stated that the Commission has failed to understand that it has “lost everything that matters, such as Ripple, the crypto industry, and the rule of law.”
While we’ll fight in court for as long as we need, let’s be clear: XRP’s status as a non-security is the law of the land today – and that does not change even in the face of this misguided – and infuriating – appeal. Remember, when the SEC tried unsuccessfully to file an “interlocutory appeal” they made clear they had no intention of challenging XRP’s status as a non-security.)
Joining the conversation, Alderoty stated emphatically that the “SEC’s decision to appeal is disappointing, but not surprising.” According to him, the notice of appeal is just an “extension of its embarrassment” since the court has already dismissed the allegation that Ripple acted recklessly. In his last statement, Alderoty questioned the coincidence of the recent decision of SEC’s top enforcement official, Gurbir Grewal, to resign after being in charge of the Agency’s 1,300 enforcement attorneys.
Instead of faithfully applying the law, this agency, under this Chair, continues to engage in litigation warfare against the industry. We are evaluating whether to file a cross-appeal. Either way, the SEC’s lawsuit has been irrational and misguided from the start, and we’re ready to prove that yet again in the appellate court (once again taking the lead for the industry)
