Ripple Labs has filed a Form C in the United States Court of Appeals for the Second Circuit, challenging a recent ruling from the US Securities and Exchange Commission, the company said.

Ripple’s chief legal officer, Stuart Alderoty, confirmed the filing in an X post on Oct. 25, adding that “the SEC can’t submit new evidence or ask [Ripple] to produce more.”

The filing follows an August decision by the US District Court for the Southern District of New York, which imposed a $125-million fine on Ripple for institutional XRP ( XRP ) sales, ruling that they constituted securities transactions.

Ripple files Form C, appeals SEC ruling on XRP institutional sales image 0

Source: Stuart Alderoty

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Contesting institutional sales ruling

Ripple’s appeal disputes the district court’s determination that its institutional sales of XRP made directly to accredited investors were securities transactions. 

The appeal specifically contests the court’s application of the Howey test, a legal standard used to determine whether a transaction qualifies as an investment contract.

Related: Ripple co-founder pledges $10M in XRP to Kamala Harris campaign PAC

Legal strategy and appeal process 

Ripple’s Form C filing lays the legal grounds for its appeal, requesting a de novo review of the case.

A de novo review allows the appeals court to reexamine the legal interpretations made by the district court without deferring to its previous conclusions.

Alderoty, having expressed optimism in his X post, said the SEC’s strategy of “distraction and confusion for Ripple and the industry” is “just background noise now.”

Ripple files Form C, appeals SEC ruling on XRP institutional sales image 1

Source: James K. Filan

Related: Ripple ‘made a mistake’ not talking to regulators early, says CEO

SEC filing against Ripple

Ripple’s filing follows an Oct. 16 appeal from the SEC that questioned the district court’s partial summary judgment favoring Ripple.

The SEC’s appeal, however, did not contest the ruling that XRP isn’t a security for programmatic sales on digital asset exchanges. Instead, it sought a review of the court’s application of securities law in institutional sales.

Judge Analisa Torres of the US District Court for the Southern District of New York ruled partially in favor of Ripple Labs in July 2023 , deciding that XRP is not a security when sold programmatically on digital asset exchanges.

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