Ripple Files Cross-Appeal in Legal Battle with SEC, Escalating the Fight Over XRP Sales

Ripple Labs has escalated its long-standing legal battle with the U.S. Securities and Exchange Commission (SEC) by filing a cross-appeal. The company is contesting parts of an August ruling that found its institutional sales of XRP violated securities laws. The cross-appeal, filed on Thursday, follows Ripple’s ongoing defence against the SEC’s lawsuit, which was initially filed in 2020.

The SEC had accused Ripple of raising $1.3 billion through unregistered securities offerings since 2013, with XRP at the centre of the controversy. While U.S. District Judge Analisa Torres ruled in August that Ripple must pay a $125 million fine for violating securities laws, the fine was significantly lower than the SEC’s demand for $2 billion. Additionally, the judge ruled that Ripple’s programmatic sales to retail investors and its distributions of XRP to employees and developers did not constitute securities sales, providing a partial victory for Ripple.

Ripple CEO Brad Garlinghouse had initially called the ruling a win, noting that the fine was far below what the SEC had sought. However, Ripple’s recent cross-appeal indicates the company’s intent to challenge the fine and other aspects of the ruling. The case will now move to the U.S. Court of Appeals for the Second Circuit.

Ripple’s Chief Legal Officer, Stuart Alderoty, emphasized the company’s determination to leave no stone unturned, stating that Ripple is seeking clarity on what constitutes an investment contract under U.S. law. Alderoty highlighted the argument that a digital asset cannot be considered a security without essential rights and obligations found in a contract, a critical point in Ripple’s defence.

Ripple Takes the Fight to a Higher Court

The SEC had already moved to appeal the ruling in early October, claiming that Judge Torres’ decision conflicted with longstanding Supreme Court precedent. The regulator hopes to overturn the ruling that found Ripple’s retail sales did not break securities laws. Ripple’s cross-appeal is a counter to this, with the company aiming to strengthen its position before the Court of Appeals.

In a statement on X (formerly Twitter), Alderoty commented on the SEC’s weak standing, particularly after the regulator failed in its earlier attempt to pursue an interlocutory appeal. Ripple’s legal team is confident that the SEC’s arguments will not hold up in court, and the company is prepared to defend its sales practices vigorously.

Ripple’s cross-appeal ensures that every aspect of the ruling will be contested, potentially setting a legal precedent that could have far-reaching implications for the cryptocurrency industry. The company’s legal battle is not just about its own operations but also about the future of regulatory oversight in the crypto space. Ripple’s victory, if achieved, could weaken the SEC’s ability to regulate digital assets through enforcement.

Ongoing Legal Saga Puts Ripple at the Centre of Regulatory Debates

The SEC vs. Ripple case has been one of the most closely watched legal battles in the cryptocurrency industry. It is seen as a pivotal case that could shape how digital assets are classified under U.S. securities laws. A victory for Ripple could embolden other cryptocurrency companies to challenge the SEC’s regulatory authority.

For now, the cross-appeal means that the case will continue to play out in the courts, with both sides gearing up for a legal showdown. With appeals in motion, the resolution of this case is far from over, and the crypto community will be closely monitoring its outcome.

Ripple’s cross-appeal underscores its determination to not only clear its name but also challenge the broader regulatory framework governing cryptocurrencies in the United States. Both Ripple and the SEC are expected to present further arguments in the coming weeks, with the timeline for final resolutions remaining uncertain.

As Ripple and the SEC prepare to go head-to-head in court once again, the stakes are high, not just for Ripple but for the entire digital asset industry.