Ripple Vs SEC: Reason For Appeal Still Missing

The long-running legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has taken a new turn. On October 2, 2024, the SEC filed a notice of appeal against a ruling from Judge Analisa Torres. The said ruling partially favored Ripple.

As per her ruling, while XRP did not meet the criteria to be classified as a security, early XRP sales by founders were identified as securities sales. However, the SEC has not yet submitted its Form C to the Second Circuit Court.

This is essential because it will outline the specifics of the SEC’s appeal, specifying what part of the ruling they are contesting. According to crypto journalist Eleanor Terrett, the SEC needs to file this form soon so Ripple can decide how to respond. Ripple has 14 days from October 3 to file a cross-appeal if they choose to challenge the SEC’s decision.

What’s at Stake for Ripple?

Ripple’s CEO, Brad Garlinghouse has responded to the appeal on X, calling the action “irrational.” However, he clarified that Ripple is prepared to continue defending its case. He also noted that the ruling that XRP is not a security still stands. He mentioned in a post on X,

“If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.”

Ripple’s chief lawyer, Stuart Alderoty, also shares his thoughts on the matter. He stated that SEC’s decision to appeal was disappointing but wasn’t unexpected.

He mentioned that Ripple is also considering an appeal challenging the court’s ruling regarding XRP sales to large institutional investors being considered illegal. If Ripple goes ahead with this, both appeals could be combined, further delaying a resolution of the case.

XRP price dropped by 11% following the appeal. Although the price has slightly recovered, there seems to be uncertainty among XRP whales. At press time, the cryptocurrency was trading at $0.52, a 10% drop in the last 24 hours, with a drop of 53% in daily trading volume to $1.51 billion.