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Ripple has formally filed a notice of cross-appeal in its long-running legal brawl with the US Securities and Exchange Commission (SEC). The filing, submitted to the United States Court of Appeals for the Second Circuit, is Ripple’s bid to contest SEC’s appeal filed earlier this month.
Ripple Files Cross-Appeal In SEC Case
Ripple’s chief legal officer Stuart Alderoty announced today that the San Francisco-based payments and fintech company had filed a cross-appeal against the SEC “to ensure nothing’s left on the table, including the argument that there can’t be an “investment contract” without there being essential rights and obligations found in a contract.”
Alderoty noted that the SEC had previously said they don’t intend to appeal the ruling that XRP itself is not a security, adding that the agency had even been forced to apologize for implying that a token in itself could qualify as a security. According to Alderoty, an appeal on other issues of the ongoing case won’t change XRP’s non-security status.
Last year, the SEC previously attempted to lodge an interlocutory appeal — a mid-case appeal — on Ripple’s XRP sales on exchanges and the firm’s other distributions of the token. The Ripple CLO believes the regulator will likely target these again “and they will lose on both again.”
“We look forward to the federal court of appeals finally putting a stake in the heart of Gensler’s misguided attack on our industry,” he added.
In early August, the court ordered Ripple to pay $125 million to resolve charges over the unregistered institutional sales of XRP tokens. The penalty, albeit more than Ripple’s proposed $10 million, is remarkably lower than the $2 billion initially demanded by the SEC, which included wide-ranging disgorgement and prejudgment interest. The judge also ruled that XRP tokens sold on secondary markets do not qualify as securities.
“Sealing The SEC’s Fate”
Commenting on the news of the company’s cross-appeal, Ripple CEO Brad Garlinghouse stressed in an X post that if the SEC and its chair Gary Gensler cared about the rule of law, they would accept their earth-shattering loss and move on. But he points out that the Wall Street watchdog is only interested in “creating havoc” rather than providing regulatory clarity to the American crypto industry.
“We’re looking forward to sealing the SEC’s fate and finally putting an end to the SEC’s regulation-by-enforcement agenda,” Garlinghouse concluded. “Ripple was the industry leader in the first go-round in court, and we look forward to leading the way in this round as well.”