Ripple Labs Files Cross-Appeal in Ongoing SEC Legal Battle
In the latest development of the long-running legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), Ripple has filed a notice of cross-appeal with the U.S. Court of Appeals for the Second Circuit. This move comes just days after the SEC filed its own appeal on October 2, challenging a previous ruling that partially favored Ripple.
The legal battle, which began in December 2020, centers around the SEC’s allegation that Ripple raised $1.3 billion through the sale of XRP as an unregistered security. In July 2023, U.S. District Judge Analisa Torres delivered a mixed ruling, stating that while Ripple’s programmatic sales of XRP to the public did not violate securities laws, its sales to institutional investors did.
Stuart Alderoty, Ripple’s Chief Legal Officer, explained the rationale behind the cross-appeal on social media platform X: “Today, Ripple filed a cross-appeal to ensure nothing’s left on the table, including the argument that there can’t be an ‘investment contract’ without there being essential rights and obligations found in a contract.”
The cross-appeal strategy allows Ripple to preserve its legal defenses and potentially challenge aspects of the earlier ruling that were not in its favor. This includes the $125 million civil penalty imposed by Judge Torres in August for violating securities laws in institutional sales.
Ripple CEO Brad Garlinghouse expressed optimism about the cross-appeal, stating they are “looking forward to sealing the SEC’s fate and finally putting an end to the SEC’s regulation-by-enforcement agenda.”
The case has significant implications for the broader cryptocurrency industry, as it may help clarify the regulatory status of digital assets in the United States. The court’s eventual decision could set a precedent for how other cryptocurrencies are classified and regulated.
Both parties are expected to submit more detailed briefs outlining their arguments in the coming weeks. The SEC’s opening brief is anticipated near the end of January, with Ripple’s response and its own arguments to follow.
As the legal process unfolds, the cryptocurrency community and regulators alike are closely watching this case, which could shape the future of digital asset regulation in the United States. The outcome may provide much-needed clarity in a sector that has long operated in a regulatory gray area.
