- Ripple CLO says the SEC’s appeal repeats old arguments dismissed by the court.
- The SEC wants XRP retail sales ruled as unregistered securities under federal law.
- Ripple is optimistic about regulatory changes and continues to expand despite legal challenges.
Ripple Chief Legal Officer Stuart Alderoty criticized the SEC’s appeal brief, calling it a reiteration of dismissed arguments. Ripple plans to formally counter the appeal, which aims to overturn a July 2023 ruling favoring XRP retail sales.
SEC Challenges Retail XRP Sales Ruling
The SEC’s appeal targets a ruling that XRP sales to retail investors were not unregistered securities under federal law. This decision, delivered by Judge Analisa Torres in July 2023, marked a major setback for the regulator.
The financial watchdog argues that Ripple fostered profit expectations among buyers, meeting the Howey Test for investment contracts. Consequently, it requested the Appeals Court vacate the lower court’s ruling and reconsider XRP’s legal status.
Ripple has filed a cross-appeal to challenge a $125 million fine imposed in August 2024 for institutional XRP sales violations. The legal complexities have expanded, with both parties preparing for lengthy court proceedings.
Weak Evidence Fuels Criticism of SEC Strategy
Pro-crypto attorney Jeremy Hogan criticized the SEC’s appeal, citing a lack of evidence proving retail buyers knew of Ripple’s promises. He described the SEC’s brief as lackluster, raising doubts about the regulator’s approach to building its case.
The absence of clear evidence has sparked questions about the SEC’s justification for targeting XRP retail sales. Without proof of buyer awareness, its arguments face significant scrutiny.
Ripple has consistently argued that the SEC’s enforcement strategy stifles innovation, while the company remains focused on defending its position.
Ripple’s Optimism Amid Regulatory Challenges
Despite ongoing litigation, Ripple expressed confidence in regulatory shifts supporting innovation. Alderoty labeled the SEC’s case as “noise,” emphasizing Ripple’s continued growth.
Ripple’s leadership anticipates a future regulatory framework fostering technological advancements and better alignment with the cryptocurrency industry. Meanwhile, the appeals process could take months, offering Ripple a chance to counter the SEC’s claims.
The pivotal question remains: Can the SEC substantiate its case without clear evidence linking Ripple’s promises to retail buyers?
