- SEC has filed an appeal against Ripple’s decision, contesting secondary sales of XRP as non-securities transactions.
- Ripple executives criticized the SEC’s legal tactics, highlighting the lawsuit’s irrationality.
On the 2nd of October, the United States Securities and Exchange Commission (SEC) took a pivotal step by filing a notice of appeal in the Ripple [XRP] lawsuit, aiming to overturn a recent ruling by Judge Analisa Torres.
What was Judge Torres’s ruling all about?
Legal experts predicted that the SEC would file an appeal following the 2023 verdict, which concluded that secondary sales of Ripple’s XRP do not qualify as securities transactions.
So for those unaware, Judge Torres concluded that XRP, on its own, does not meet all the criteria of the SEC’s Howey test for investment contracts, ruling that secondary sales cannot be labeled as unregistered securities sales.
However, she noted that Ripple’s founders’ initial sales to institutional investors did qualify as securities sales.
This landmark decision marked a significant victory for Ripple Labs and the broader cryptocurrency sector.
Ripple’s execs criticize SEC’s move
However, the legal battle seems to be ongoing with the SEC’s recent notice of appeal, drawing criticism from various quarters, including Ripple’s Chief Legal Officer, Stuart Alderoty.
In a post on X (formerly Twitter), Alderoty expressed disappointment over the SEC’s decision to appeal, calling it unsurprising but pitiful, as it only extends what he described as a significant embarrassment for the agency.
He pointed out that,
“The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course, there were no victims or losses.”
Here, Alderoty explains that the agency, under its current chair, is using aggressive legal tactics against the cryptocurrency industry instead of adhering to legal principles and regulations.
Providing further insight on the matter, he noted,
“We are evaluating whether to file a cross appeal. Either way, the SEC’s lawsuit has been irrational and misguided from the start, and we’re ready to prove that yet again in the appellate court (once again taking the lead for the industry).”
Well, Alderoty wasn’t alone in his criticism, Ripple CEO Brad Garlinghouse also shared his perspective, and emphasized,
Source: Brad Garlinghouse/X
Impact on XRP
Strangely, this event coincided with digital asset manager Bitwise reportedly filing for an XRP exchange-traded fund (ETF) in Delaware.
Meanwhile, XRP’s price slipped by 14.56% in the past 24 hours, reaching $0.5132, according to CoinMarketCap.
Hence, as developments unfold and Ripple prepares to cross-appeal, it will be interesting to see the implications for Ripple Labs, XRP’s price, and the anticipated XRP ETF.
