Ripple Gears Up to Challenge SEC Appeal on XRP Ruling

Ripple Labs is preparing for another legal showdown with the United States Securities and Exchange Commission (SEC) after the regulator filed an appeal to contest a court ruling. The July decision by the Southern District Court of New York had determined that Ripple’s retail sales of XRP did not violate securities laws, a win Ripple intends to defend fiercely.

Ripple’s CEO Vows to Fight On

On October 3, Ripple CEO Brad Garlinghouse reaffirmed the company’s commitment to upholding XRP’s non-security status. In a post on X (formerly Twitter), Garlinghouse expressed frustration with the SEC’s continued legal push. He stated, “Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.” His remarks reflect the company’s resolve to fight the appeal until the very end.

The appeal, filed on October 2, challenges the court’s decision that XRP sales to retail investors did not classify as securities. The original ruling by Judge Analisa Torres on July 13 marked a significant victory for Ripple and the broader cryptocurrency market, as it applied the Howey test and concluded that XRP itself was not a security. However, the court did find Ripple’s institutional sales had violated securities laws, leading to the SEC’s efforts to impose penalties.

The SEC originally sought a hefty $1.95 billion penalty, though Judge Torres reduced the fine to $125 million, with the stipulation that Ripple would need to formally register with the SEC if it intends to offer securities in the future. On September 4, both parties agreed to a stay order, with Ripple depositing 111% of the fine into a secure account, delaying the payment while the appeal process plays out.

Ripple’s chief legal officer, Stuart Alderoty, criticized the SEC’s continued litigation efforts, calling it “not surprising” and labeling the agency’s approach as “litigation warfare.” He also hinted at the possibility of Ripple filing a cross-appeal if necessary.

With Ripple ready to defend its previous victory, the ongoing battle could set significant legal precedents for the cryptocurrency industry.