Lawrence Damilola
Ripple Labs has filed a cross-appeal in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), submitting the appeal to the U.S. Court of Appeals for the Second Circuit. However, this cross-appeal follows the SEC’s recent notice of appeal regarding an earlier court ruling in the case. Ripple’s cross-appeal was filed to ensure that all aspects of the case were fully addressed.
Ripple’s chief legal officer, Stuart Alderoty, commented on the filing yesterday, stating that the cross-appeal focuses on the argument that an “investment contract” requires essential rights and obligations, which Ripple argues were not present in its sale of XRP. This legal action is part of Ripple’s broader strategy in response to the SEC’s charges.
The Background of the Case
The SEC initially brought charges against Ripple in 2020, accusing the company of raising $1.3 billion through the sale of XRP, which it claimed was an unregistered security. U.S. District Judge Analisa Torres ruled in July 2023 that Ripple’s programmatic sales of XRP, conducted through exchanges, did not violate securities laws. However, she also ruled that Ripple’s direct sales of XRP to institutional investors were considered securities transactions under federal law.
Following this ruling, Ripple was ordered to pay $125 million in fines related to direct sales to institutional investors. The court’s ruling drew attention to the distinction between Ripple’s sales to institutions and its programmatic sales on exchanges.
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Ripple and SEC File Appeals as Legal Battle Continues
The SEC is seeking to challenge the court’s finding that programmatic sales of XRP did not violate securities laws. The SEC had previously sought an interlocutory appeal, but Judge Torres denied that request.
Both Ripple and the SEC have now filed notices of appeal, and more detailed arguments will be presented in the coming months. The SEC’s brief is expected to be submitted by January 2024, with Ripple filing its response afterward.
Stuart Alderoty has stated that Ripple is prepared to continue contesting the case through the appeals process, noting that the cross-appeal is intended to ensure that all legal arguments are addressed.
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The case between Ripple and the SEC has been ongoing for nearly four years and remains a central legal battle within the cryptocurrency sector.
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LAWRENCE
Lawrence is a cryptocurrency journalist covering blockchain developments and digital assets.
