Ripple announced on October 10 that it would file a cross-appeal with the U.S. Court of Appeals for the U.S. SEC vs. Ripple lawsuit. The decision came after the U.S. Securities and Exchange Commission filed a notice for appeal to Judge Torres’s final judgment in August of this year. Ripple filed the notice under the case’s defendants, Ripple Labs, Bradley Garlinghouse, and Christine Larsen.
Judge Annalisa Torres ruled that the XRP issuer was obligated to pay $125 million as a civil penalty. The judge found the company violated U.S. securities regulations for selling XRP, to institutional clients.
The fine was significantly higher than Ripple’s suggestion of $10 million and lower than the commission’s suggestion of $2 billion. The crypto firm was required to settle the amount 30 days after Judge Torres passed the final judgment.
Judge Torres also confirmed that all XRP tokens sold by Ripple to secondary markets were not securities and did not violate U.S. securities laws. The judge still believed that while the company had not violated the rules, it would probably do so in the future.
The XRP issuers case has been ongoing since December 2020, when the U.S. SEC filed a lawsuit against the firm. Many parties following the case, including the firm’s CEO Brad Garlinghouse, believed the long case was ending.
U.S. SEC files a notice of appeal
🚨BREAKING: The @SECGov has filed a 1 page NOTICE OF APPEAL of the ruling by Judge Analisa Torres in the @Ripple case 👇🏻 pic.twitter.com/KSwURMEa5n
— CryptoLaw (@CryptoLawUS) October 2, 2024
The U.S. SEC filed for a notice of appeal on October 3 with the United States Court of Appeals for the Second Circuit for the judgment made by Judge Torres on August 7. The court required the commission to file the notice of appeal before October 4. However, the commission has not divulged what it plans to appeal.
Multiple parties in the crypto space, including Fox Business journalist Eleanor Terrett, speculated that the commission would appeal to Judge Torres’s 2023 judgment. The judge concluded that XRP did not meet the requirements to rank as a security according to the Howey Test. Judge Torres also confirmed that all Ripple XRP programmatic sales did not violate any securities laws.
Ripple’s Stuart Alderoty believes the commission’s basis for appeal is weak
Ripple’s Stuart Alderoty believed that the U.S. SEC’s basis for the appeal was weak. The Ripple Chief Legal Officer tweeted that the reason behind the commission’s appeal was that it had lost on all key points in the case. Alderoty confirmed that Ripple’s cross-appeal would ensure nothing was left in the case.
Alderoty also highlighted the commission’s previous statement that it would not be appealing the ruling that XRP was not a security. The firm’s chief legal officer further outlined the previous failed trial of the SEC to appeal the judgment that XRP sales on exchanges and other distributions were not violating any laws.
Stuart hoped the federal court would stop Gary Gensler’s attack on the crypto community. The U.S. SEC has notably been involved in several rulings against crypto companies and exchanges, including Kraken, Coinbase, and others.