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The SEC is appealing a recent federal court ruling in its ongoing case against Ripple Labs and XRP, filing the notice with the Second Circuit Court of Appeals on October 2.
This appeal follows a key August decision that yielded mixed results for the agency. Ripple’s CEO, Brad Garlinghouse, and CLO, Stuart Alderoty, expressed disappointment over the SEC’s choice to appeal and vowed to continue fighting in court.
The SEC’s lawsuit, initiated in December 2020, accused Ripple of conducting an unregistered securities offering worth $1.3 billion through XRP sales. The regulator argues that the court’s ruling contradicts established Supreme Court precedents.
While Ripple welcomed parts of the ruling, particularly the finding that retail XRP sales on exchanges were not violations of securities laws, the court did find that Ripple’s sales to institutional investors amounted to unregistered securities, resulting in a $125 million penalty. The SEC had originally sought a fine of $2 billion, making the outcome a partial win for Ripple.
Following the announcement of the appeal, XRP’s value dropped approximately 9%, trading just above $0.54. Garlinghouse criticized the SEC for prolonging the litigation, asserting that they had already lost on critical points and that XRP’s status as a non-security is upheld by law.
Alderoty supported this view, highlighting the court’s finding that there were no “victims or losses” in the case and suggesting that the SEC is engaged in unwarranted litigation against the crypto industry. The Ripple team is also considering a cross-appeal.