The U.S. Securities and Exchange Commission (SEC) has filed an appeal with a federal judge in its long-running lawsuit against cryptocurrency and fintech company Ripple over the sale of XRP cryptocurrency, a decision that has undoubtedly added further turmoil to the already volatile cryptocurrency market.
In a court document filed on Wednesday, the SEC filed a notice of appeal with the Second Circuit Court of Appeals, making it clear that it would appeal the final decision made by U.S. District Judge Analisa Torres in August. It is worth noting that on that day, the price of XRP was already in a downtrend, and after the news of the SEC's appeal came out, its price fell further. As of now, the value of XRP has fallen by nearly 10%, and the trading price per coin has barely maintained above $0.54.
A spokesperson for the SEC said: “We believe that the district court’s ruling in the Ripple case is inconsistent with decades of Supreme Court precedent and fundamental principles of securities law. We look forward to continuing this litigation in the Second Circuit to uphold the fairness and authority of the law.”
Looking back at history, the SEC filed a $1.3 billion lawsuit against Ripple in 2020, accusing the company of raising funds by selling unregistered securities to investors by issuing the cryptocurrency XRP. This accusation caused an uproar in the cryptocurrency field and triggered widespread discussion on cryptocurrency regulation.
However, last year, a judge ruled that XRP, a cryptocurrency that was sold programmatically to retail investors through cryptocurrency exchanges, did not qualify as a security. This ruling was widely seen as a victory for Ripple and the cryptocurrency industry as a whole. Although the judge also ruled that institutional sales of tokens worth $728 million did constitute unregistered securities sales, the positive impact of this ruling cannot be ignored.
In an August ruling, a New York court only required Ripple to pay a fine of $125 million, far less than the $2 billion the SEC initially requested. However, the SEC was apparently not satisfied with the ruling and chose to appeal.
Ripple did not immediately respond to the SEC's appeal decision. But Ripple CEO Brad Garlinghouse expressed his views on social media: "If the SEC and Gary Gensler (SEC Chairman) were rational, they should have withdrawn from this case long ago. This lawsuit not only fails to protect investors, but also damages the credibility and reputation of the SEC."
Ripple is a company dedicated to speeding up cross-border transactions through its technology. Its founder also created XRP, the seventh-largest cryptocurrency by market value. The SEC's appeal will undoubtedly once again spark a wide-ranging discussion on the regulation and legality of cryptocurrencies.
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