Originally published on: October 25, 2024
In a bold move, Ripple Labs has filed an appeal challenging a recent ruling from the US Securities and Exchange Commission regarding XRP institutional sales. The company confirmed that it has submitted its Form C to the United States Court of Appeals for the Second Circuit, setting the stage for a legal battle.
Stuart Alderoty, Ripple’s chief legal officer, shared the news in a recent post, highlighting that the SEC cannot introduce new evidence or request additional information from Ripple. This appeal follows a significant decision by the US District Court for the Southern District of New York, which imposed a hefty fine of $125 million on Ripple for its institutional XRP sales.
The crux of the appeal lies in contesting the district court’s classification of Ripple’s sales of XRP to accredited investors as securities transactions. Ripple argues against the application of the Howey test, a standard used to determine the nature of investment contracts.
By filing Form C, Ripple aims to pave the way for a de novo review of the case, allowing the appeals court to re-evaluate the legal interpretations without adhering to previous conclusions. Alderoty expressed confidence in the appeal process, brushing off the SEC’s attempts to create “distraction and confusion.”
The appeal from Ripple comes on the heels of a similar move by the SEC questioning the partial summary judgment favoring Ripple by the district court. While the SEC did not challenge the ruling that XRP is not a security in digital asset exchange sales, it sought a review of the application of securities law in institutional transactions.
With these legal battles heating up, the future of XRP and Ripple hangs in the balance. Stay tuned for more updates on this evolving story. Don’t miss out on the latest news and insights into crypto laws and guidelines by subscribing to our newsletter. Make informed decisions for your crypto ventures with the Law Decoded newsletter delivered fresh every Monday. Subscribe now to stay ahead of the curve!
