SEC files appeal in Ripple case as XRP price drops 10%

The Securities and Exchange Commission (SEC) has filed an appeal with the Second Circuit Court of Appeals regarding a ruling in its ongoing case against Ripple (CRYPTO:XRP), a cryptocurrency and fintech company.

This appeal challenges the August decision by U.S. District Judge Analisa Torres, who ruled that Ripple's programmatic sales of XRP on cryptocurrency exchanges did not qualify as securities.

Following the SEC's filing, the price of XRP dropped further, shedding almost 10%, trading at just over $0.54 per coin.

The SEC first sued Ripple in 2020, accusing the company of selling unregistered securities in the form of XRP to raise $1.3 billion.

The court ruling last year was seen as a partial victory for Ripple and the broader crypto industry.

While the judge ruled in favor of Ripple's programmatic sales, institutional sales worth $728 million were classified as unregistered securities, leaving Ripple with a $125 million penalty, much lower than the SEC’s original $2 billion fine request.

According to an SEC spokesperson, "We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit."

Ripple's CEO, Brad Garlinghouse, reacted to the news on X (formerly Twitter), stating, "If [SEC Chair Gary] Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC."

The lawsuit has had ongoing implications for Ripple and XRP, which is currently the seventh-largest cryptocurrency by market capitalization.

Ripple's founders, who developed XRP, aim to enhance cross-border transactions through their technology, while the SEC continues to challenge the legality of the token’s sales.

At the time of reporting, the XRP price was $0.5349.