Ripple must file a cross-appeal within 14 days of the SEC’s decision challenging the court’s ruling. Ripple’s CEO criticized the SEC’s legal battle as irrational and stressed that XRP’s non-security status remains unchanged.
The latest update on Ripple’s long-running legal dispute with the U.S. Securities and Exchange Commission (SEC), according to cryptocurrency influencer Marty Partey, claims that Ripple is facing a court ruling over the sale of XRP to institutional investors. They have 14 days to file a counterclaim against the decision. .
Following a July 2023 district court ruling that the sale of XRP on public exchanges does not meet the legal definition of a security, the SEC decided to appeal, resulting in a significant gain for Ripple. An SEC spokesperson said:
“We believe the district court’s decision in the Ripple matter is inconsistent with decades of Supreme Court precedent and securities law, and we look forward to filing a lawsuit in the Second Circuit.”
Repercussions from the SEC’s partial victory and future legal strategies
However, in the same example, the SEC had a partial victory when Ripple was fined $125 million for selling XRP to institutional investors. Although the fine is much lower than the SEC’s original $2 billion demand, Ripple is still discussing an appeal of the decision.
If Ripple chooses to act, the SEC’s appeal and Ripple’s counterclaim will be combined into a single case in the U.S. Court of Appeals for the Second Circuit.
Ripple’s chief legal officer Stuart Alderoti said the SEC’s action was not shocking, but still disappointing. He said the SEC’s decision was more like a “litigation battle” than an enforceable law.
XRP CEO Brad Garlinghouse also attacked the SEC’s actions, saying the court had confirmed that XRP is not a security on the public market. Therefore, an appeal by the SEC will not change that. Garlinghouse also said that Ripple is prepared to go to court as long as necessary to prove its case.
Extended legal proceedings leave uncertainty in crypto sector
An appeals process is to be developed and a verdict is not expected until early 2026. Initial filings from the SEC and Ripple are expected to begin in late 2024 or early 2025. Oral arguments are expected to take place later in 2025. The fate of XRP and Ripple is likely to remain unknown for years to come as authorities continue to put pressure on the entire cryptocurrency sector.
Ripple remains focused on other initiatives within the legal process, including the release of the RLUSD stablecoin and the possible introduction of an XRP-based ETF. This declaration, likely to be made at Ripple’s upcoming annual event ‘Swell’, will add to the existing anxiety in the crypto community as they await clarity on the matter.
According to our previous report, the SEC has formally challenged Judge Annalisa Torres’ decision regarding Ripple’s programmatic XRP sales. Brad Garlinghouse argued that the SEC’s ruling was “unreasonable” and not intended to protect investors. Rather, it was an action designed to prolong an ongoing legal dispute.
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