The U.S. SEC is willing to continue its years-long battle with the blockchain-powered cross-border remittance provider Ripple. However, Ripple’s chief legal officer Stuart Alderoty termed the case as noise and believes the case will be dismissed in the next administration.
The United States Securities and Exchange Commission (SEC) has filed its opening brief to escalate its legal battle against blockchain-based digital payment network Ripple with only a few hours before the deadline elapsed.
In October last year, the U.S. Court of Appeals for the Second Circuit ordered that the U.S. SEC vs. Ripple and its executive brief be filed on or before January 15, 2025 failure to which the appeal would be dismissed.
Court filings show the U.S. SEC is challenging Judge Analisa Torres’ July 13, 2023 ruling
The court documents reveal that the regulator seeks to challenge part of the July 13, 2023 ruling by New York Judge Analisa Torres that categorized XRP tokens differently when dispensed to retail and institutional investors.
#XRPCommunity #SECGov v. #Ripple #XRP @Ripple The @SECGov has filed its opening brief.https://t.co/v0YTjHGxzV
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) January 15, 2025
The financial watchdog explained that Torres’ conclusion that profits can’t be expected unless investors knowingly buy from the issuer is against both applicable law and the “undisputed facts.” The SEC emphasized that the court’s ruling is against fundamental securities laws and builds an unsustainable contradiction between investor expectations. The SEC argues that the ruling contradicts the Howey Test which is used to establish whether an asset is a security or not.
The document showed that the regulator continued to accuse Ripple, its co-founder Christian Larsen, and the company’s Chief Executive Officer Brad Garlinghouse of breaking the securities regulations when selling XRP tokens to retail and institutional investors. The commission also criticized the ruling for distinguishing institutional investors from retail ones, saying that Ripple’s extensive marketing aimed at boosting XRP’s price.
Ripple’s executives respond to U.S. SEC’s last-minute filing
Ripple’s Chief Legal Officer Stuart Alderoty wrote on X that the last-minute move by the regulator was expected. The legal expert said the new court filing is a reconstitution of the initial arguments that failed in previous court proceedings.
Alderoty termed the legal action by the financial watchdog as “noise” and expressed his beliefs that the new administration under President-elect Donald Trump will abandon the years-long case in due time. The legal expert also highlighted that a new era of regulations supporting the crypto industry is about to begin and Ripple will thrive.
“As expected, the SEC’s appeal brief is a rehash of already failed arguments –and likely to be abandoned by the next administration. We’ll respond formally in due time. For now, know this: the SEC’s lawsuit is just noise.” – Stuart Alderoty
Ripple’s Chief Executive Officer Brad Garlinghouse also commented on the SEC’s legal action, calling it insanity. He bashed the regulator for doing the same thing over and over while expecting different results.
XRP soars despite the legal dispute
The Ripple community has previously accused the U.S. SEC of trying to delay the conclusion of its legal battle with Ripple. Users claim that the regulator was intentionally filing at the last minute to frustrate the defendants and the entire crypto community.
Despite the legal entanglement, investors are optimistic about the possible outlook of XRP and the general crypto market this year. XRP has emerged as the top-performing asset among the top ten largest cryptocurrencies by market capitalization. According to data from crypto data aggregator CoinMarketCap, XRP is up about 8% in the last 24 hours, fueling its seven-day gain to 28.77%.
The digital asset retails at $3.02 with a market cap of 173.7 billion and a 24-hour trading volume of $22.7 billion. The cryptocurrency now ranks third among the largest digital assets by market capitalization behind Bitcoin and Ethereum.
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