US SEC Files Official Appeal Against Ripple Ruling, XRP Experiences Minor Price Dip
The U.S. Securities and Exchange Commission (SEC) has taken the formal step of appealing the court ruling in its case against Ripple regarding the cryptocurrency XRP. The SEC submitted Form C to the U.S. Court of Appeals for the Second Circuit. Following this news, the market value of XRP slightly dipped by 0.34%.
In its appeal, the SEC challenges the court’s decision that Ripple’s sales of XRP on digital asset platforms were not unregistered securities, as well as the ruling that personal sales by Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen did not violate securities laws. Additionally, the SEC disputes the court’s finding that Ripple’s non-cash XRP distributions, which were offered in exchange for services, did not violate the Securities Act of 1933.
However, the filing has raised questions due to discrepancies between the SEC’s Form C, dated October 16, and the court’s file stamp on the document, dated October 17. This has led to doubts about whether the SEC missed the deadline for appealing the ruling.
Marc Fagel, a retired securities lawyer and XRP user, suggested that there may be a docketing time lag, stating, “I’m not an appellate guy, but is it possible there is a docketing time lag? The filing shows the SEC pulled the district court docket early Wednesday morning; kind of a weird thing to do if they weren’t planning to file it Wednesday.”
Ripple’s Chief Legal Officer, Stuart Alderoty, responded to the filing on X and announced that Ripple will be filing a Form C next week. Alderoty clarified that Ripple will not be appealing the court’s ruling that “XRP is not a security.”
In terms of XRP’s performance, the cryptocurrency saw a slight dip of 0.34% in the past day and is currently trading at 0.5457. However, its trading volume has increased by 33.75% to $1.44 billion at the time of writing.
This second filing by the SEC follows its initial lawsuit against Ripple and its leaders, accusing them of violating sections of the Securities Act of 1933 by offering and selling XRP without proper registration.
The appeal comes after a district court ruling delivered by Judge Analisa Torres, which resulted in a split decision. In July 2023, Ripple achieved a partial victory when the court determined that XRP sales on cryptocurrency trading platforms did not qualify as securities. However, the court also ruled that Ripple’s sales of XRP to institutional investors were unregistered securities. The judgment further stated that Garlinghouse and Larsen’s personal sales of XRP did not constitute violations.
In August, the court ordered Ripple to pay $125,035,150 in civil penalties and imposed a prohibition on further breaches of the Securities Act.