The US SEC has announced its decision to appeal a federal court ruling in its long legal battle against Ripple Labs and XRP. Notably, the SEC’s notice of appeal, filed with the Second Circuit Court of Appeals on Oct. 2, follows a key August ruling that dealt with a mixed outcome in the regulator’s high-profile case against Ripple.
Ripple Executives have voiced their disappointment with the regulator’s decision to appeal and also reaffirmed their intent to fight the case in court.
XRP Badly Hit By SEC’s Move
The SEC, which sued Ripple in December 2020 over allegations that the company conducted a $1.3 billion unregistered securities offering through XRP sales, contends that the district court’s decision conflicts with longstanding Supreme Court precedent.
Ripple had initially celebrated parts of the ruling as a victory for the crypto industry. US District Judge Analisa Torres ruled that programmatic sales of XRP to retail investors via crypto exchanges did not violate securities laws.
However, the judge also found that Ripple’s direct sales of XRP to institutional investors worth $728 million did constitute unregistered securities sales, resulting in a $125 million penalty for the company. XRP was badly hit by this move of SEC as the news sent XRP plunging further in value, as it dropped over 11%. It is currently trading at $0.5421, down by over 10% in the last 24 hours.
Ripple Execs Slam Sec
Stuart Alderoty, The Chief Legal Officer expressed that the SEC’s decision to appeal is disappointing, but not surprising. He noted that this just prolongs what is already a complete embarrassment for the agency. He emphasized that the court rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and no victims or losses.
He explicitly shared that “instead of faithfully applying the law, this agency, under this Chair, continues to engage in litigation warfare against the industry. 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, taking the lead for the industry.”
Furthermore, Coincidentally, the SEC’s Enforcement Director, Gurbir Grewal, announced his resignation about an hour before the SEC filed its appeal. Grewal’s exit leaves room for more speculations about whether or not there will be changes to the US SEC’s approach to enforcing laws in the crypto space.
