SEC Files Final Appeal in Ripple Case – Why the XRP Army Is Angry

The U.S. Securities and Exchange Commission (SEC) has filed a last-minute appeal in its ongoing legal battle with Ripple Labs, seeking to overturn part of a summary judgment issued by U.S. District Judge Analisa Torres more than a year ago.

Torres’ July 2023 ruling partially favored Ripple by concluding that the company’s sale of XRP to individual investors on the digital asset platform did not violate U.S. securities laws.

The court ruled that these transactions did not meet the legal standard for investment contracts, dealing a blow to the SEC’s broader efforts to regulate cryptocurrency sales under existing securities laws.

In a filing late Thursday with the U.S. Court of Appeals for the Second Circuit, the SEC did not challenge its decision that sales of XRP to retail investors through exchanges are not securities. Instead, the agency is focusing its challenge on other key aspects of the ruling.

The appeal targets the court’s decision that Ripple’s offer and sale of XRP on its digital asset trading platform, as well as private sales by Ripple executives Bradley Garlinghouse and Christian Larsen, did not constitute securities violations. .

The agency is also challenging a ruling that Ripple’s distribution of XRP for non-cash consideration did not violate securities laws.

Ripple’s institutional sales of

The SEC’s newly reviewed appeal will allow the appellate court to reconsider the lower court’s interpretation of securities laws related to XRP sales and non-cash transactions on digital platforms.

De novo means that the appellate court does not respect the district court’s interpretation and reconsiders these legal issues from the beginning. However, Ripple’s victory over XRP’s retail sales remains intact and is not part of the appeal.

Although the SEC was widely expected to file its notice of appeal on October 2, users took to social media to criticize the agency for missing the 14-day window to file Form C.

In the context of appellate court proceedings, Form C is used by the appellant (in this case, the SEC) to provide basic information about the appellate and lower court decisions.

Submission is required and must be completed within 14 days of filing the notice of appeal, subject to the statutory provisions of the form itself. While the documents are dated October 16, the Second Circuit docket lists them as October 17, a date that some have accused the agency of missing.

decryption We have attempted to contact the SEC regarding this issue, but have not received a response so far. A Ripple spokesperson did not answer questions regarding the deadline, but instead pointed to: decryption A social media post from Stuart Alderoty, the company’s chief legal officer.

“No surprises here. It’s clear once again. The court’s ruling that “XRP is not a security” will not be appealed. That decision is valid as the law of the land,” Alderoty said. tweeted thursday.

“Stay tuned for Ripple’s Form C to be submitted next week,” the executive added.