The Securities and Exchange Commission (SEC) has made the decision to appeal a federal court ruling in the ongoing legal battle against Ripple Labs and XRP. The SEC filed a notice of appeal with the Second Circuit Court of Appeals on Oct. 2, following a significant ruling in August that had mixed outcomes for the regulator.
In the lawsuit filed in December 2020, the SEC alleged that Ripple had conducted a $1.3 billion unregistered securities offering through the sale of XRP. The recent ruling by US District Judge Analisa Torres found that while programmatic sales of XRP to retail investors did not violate securities laws, direct sales of XRP to institutional investors did constitute unregistered securities sales. This resulted in a $125 million penalty for Ripple, much lower than the $2 billion fine initially sought by the SEC.
Ripple CEO Brad Garlinghouse and CLO Stuart Alderoty expressed disappointment with the SEC’s decision to appeal and reiterated their commitment to fighting the case in court. Garlinghouse criticized the agency for wasting taxpayer money on a case that he believes has already been decided in Ripple’s favor on key issues. He emphasized that XRP’s status as a non-security remains the law, regardless of the SEC’s appeal.
The news of the SEC’s appeal caused XRP’s value to drop around 9% in the past day, trading just above $0.54 as of press time. Garlinghouse and Alderoty both slammed the SEC for its continued legal battle, with Alderoty stating that the court had determined there were no victims or losses in the case. He criticized the agency for engaging in “litigation warfare” against the industry and mentioned the possibility of filing a cross-appeal.
At the time of writing, XRP is ranked #7 by market cap with a market capitalization of $30.88 billion and a 24-hour trading volume of $2.54 billion. The total crypto market is valued at $2.12 trillion with a 24-hour volume of $92.72 billion, and Bitcoin dominance is currently at 56.74%.
The outcome of the SEC’s appeal will be closely watched by the crypto industry as Ripple continues to defend its case in court. The legal battle between Ripple and the SEC has significant implications for the regulatory treatment of cryptocurrencies and the future of the industry.