The U.S. Securities and Exchange Commission (SEC) has refueled its legal battle with Ripple, filing an appeal on October 16. However, the key point is that the SEC is not challenging the court’s earlier decision that XRP is not a security.
This latest appeal, made public by Ripple’s defense attorney, James Filan, on October 17, targets other aspects of the case. The SEC is asking the court to revisit its decisions around XRP sales on exchanges and personal sales by Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen. Essentially, the SEC wants a fresh look at whether those sales violated securities laws, claiming the two executives “aided and abetted” Ripple in breaking the rules in fact.
#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed the Civil Appeal Pre-Argument Statement (Form C) with attachments.https://t.co/LpSFIjMZhC
— James K. Filan (@FilanLaw) October 17, 2024
XRP’s Non-Security Status Stands
While the SEC is aiming at these other issues, Ripple’s chief legal officer, Stuart Alderoty, pointed out on X (formerly Twitter) that the key ruling on XRP’s non-security status isn’t part of this appeal. “That decision stands as the law of the land,” he emphasized. In other words, XRP’s classification as a non-security remains sacred — unchanged.
No surprises here — once again it’s been made clear. The Court’s ruling that “XRP is not a security” is NOT being appealed. That decision stands as the law of the land.Stay tuned for Ripple’s Form C to be filed next week. https://t.co/m9molUGSBv
— Stuart Alderoty (@s_alderoty) October 18, 2024
Alderoty also mentioned that Ripple plans to file its appeal next week, showing that the legal back-and-forth is far from over.
What the SEC Wants to Revisit
The SEC’s appeal revolves around the court’s partial summary judgment that favored Ripple. Specifically, the SEC is contending the rulings on XRP sales made on exchanges, personal sales by Garlinghouse and Larsen, and Ripple’s distributions of XRP in exchange for non-cash benefits. The SEC is pushing for a ‘de novo’ review, which means they want the court to re-examine everything from scratch.
This legal battle is far from wrapping up anytime soon. According to Fox Business producer Eleanor Terrett, Ripple is expected to file its appeal within the next week. After that, both parties will agree on a briefing schedule. The SEC will have up to 90 days to submit its first formal brief, and according to Alderoty, they’re likely to take the full time. This means the case could drag on, with the briefing process expected to extend through July 2025.
NEW: Just had a great chat with @s_alderoty of @Ripple who gave me a rundown of the appeals timeline. The @SECGov’s last day to file Form C (which will give some level of detail about what it plans to appeal) is tomorrow.Seven days later, Ripple will file its own Form…
— Eleanor Terrett (@EleanorTerrett) October 15, 2024
Ripple’s Earlier Victory
To recap, back in August 2023, Judge Analisa Torres of the U.S. District Court for the Southern District of New York ruled that XRP is not a security when sold programmatically on digital asset exchanges. This was seen as a partial win for Ripple in the larger case. That said, Ripple wasn’t completely off the hook. The court also imposed a $125 million civil penalty and banned Ripple from further violations of Section 5 of the Securities Act of 1933.
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