Ripple Execs Strikes SEC With Cross-Appeal, Pledge to ‘Leave Nothing on the Table’

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CCN2024/10/11 22:33

By:CCN

Key Takeaways

Ripple has filed a cross-appeal against the SEC’s decision to appeal the initial ruling in its favor.
The SEC’s appeal seeks to overturn the ruling that programmatic XRP sales to retail investors were not securities violations.
Ripple’s cross-appeal aims to address all aspects of the case and ensure a definitive resolution.

Ripple Labs has ramped up its legal fight with the U.S. Securities and Exchange Commission (SEC), filing a cross-appeal with the Second Circuit Court of Appeals.

By pushing back, Ripple is looking to resolve any lingering legal issues as it takes on the SEC’s regulation-by-enforcement approach.

Ripple Contests SEC’s Appeal

Ripple has taken a major step in its ongoing fight with the SEC by filing a cross-appeal in response to the agency’s recent appeal. The filing allows Ripple to contest specific parts of the Aug. 7 judgment.

While Ripple was ordered to pay $125 million in penalties over institutional XRP sales, the court’s ruling was a partial win for the company, as it determined that XRP sold on secondary markets weren’t considered securities. The SEC, however, wants to overturn the decision that programmatic sales of XRP to retail investors didn’t break securities laws.

Ripple’s notice to file a cross-appeal. l Credit: U.S. Court of New York

The market responded swiftly to Ripple’s cross-appeal, with XRP’s price rising by 1.8% to $0.5357, alongside a 52% spike in trading volume and a market cap increase to $30.35 billion.

“Leaving Nothing On The Table”

Stuart Alderoty, Ripple’s Chief Legal Officer, emphasized that the SEC’s decision to appeal stems from losing on all critical points.

Explaining Ripple’s decision to counter with a cross-appeal, Alderoty stated,

“Ripple filed a cross-appeal to ensure nothing’s left on the table, including the argument that there can’t be an “investment contract” without there being essential rights and obligations found in a contract.”

Alderoty clarified that Ripple is out to close the chapter on the SEC’s “regulation-by-enforcement” strategy. “We’re looking forward to sealing the SEC’s fate,” he stated, noting that Ripple, already a key player in the court’s initial ruling, intends to lead the charge again.

Ripple CEO Brad Garlinghouse echoed Alderoty’s stance , taking a swipe at SEC Chair Gary Gensler . “If Gensler and the SEC cared about the rule of law, they would accept their loss and move on,” he remarked. Instead, Garlinghouse argued, the agency is more focused on disruption than on fostering innovation in the U.S.

Legal experts like crypto attorney Fred Rispoli saw Ripple’s move as inevitable. “Stakes are super high now,” Rispoli tweeted , predicting that a reversal on the SEC’s win regarding institutional sales would deal a devastating blow to the regulator.

Bitnomial Joins Legal War Against SEC

Adding to the war against the SEC, cryptocurrency derivatives exchange Bitnomial launched a lawsuit against the SEC in Illinois federal court, challenging the agency’s jurisdiction over its planned XRP futures contract.

The exchange, regulated by the Commodity Futures Trading Commission (CFTC) , filed for the XRP/USD futures in August, just after Ripple secured a key legal win in its battle with the SEC. A federal judge had rejected the SEC’s argument that XRP is a security.

Bitnomial filed a lawsuit against the SEC. l Credit: Bitnomial filing

The exchange is seeking a court declaration that XRP Futures are not securities futures. Additionally, the exchange requests an order preventing the SEC from claiming authority over XRP Futures and taking any legal action against Bitnomial related to its product offering.

“Bitnomial disagrees with the SEC’s view that XRP is an investment contract and, therefore, a security, and that XRP Futures are thus security futures. Moreover, the Southern District of New York has already rejected the SEC’s position that XRP was a security when traded on a secondary market, as XRP Futures would be,” the exchange said in the filing.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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