The Securities and Exchange Commission (SEC) is finally appealing the July 2023 ruling by U.S. District Judge Analisa Torres that the programmatic sales of XRP didn’t constitute a securities violation.
In a court document filed on Oct. 2nd, the SEC presented its Notice of Appeal, wherein it said the agency “respectfully appeals to the United States Court of Appeals for the Second Circuit from the final judgment entered by this Court on August 7, 2024.”
The SEC had until Oct. 7 to decide whether to appeal the ruling or not. The development today means that the years-long legal battle between the regulator and Ripple will continue again.
Prior to the appeal, a former SEC attorney revealed just last week that everyone at the agency believed that judge Torres’s ruling was wrong.
“Everyone over there [at the SEC] truly believes that the decision is wrong, that it’s not good law, and should be appealed,” the attorney said.
Last year, Judge Analisa Torres of the United States District Court for the Southern District of New York dismissed the securities status of secondary markets for XRP. This was a major win for Ripple. However, the difference between the programmatic and institutional sales of XRP continues to be debated.
The judge also ordered Ripple to pay a $125 million fine in August of this year, while the SEC initially sought $2 billion in disgorgement, prejudgment interest, and civil penalties. The implementation of this fine has been halted until the SEC’s appeal is either decided on or the time for appeal has passed.
However, since the appeal has been filed, the U.S. Court of Appeals for the Second Circuit will consider the merits of Judge Torres’ decision. This process will more than likely prolong the time of the case even further.
In response to the SEC’s move to appeal its case against Ripple, Ripple CEO Brad Garlinghouse has now called out the regulator for its handling of the matter. In his post, Garlinghouse stated, “If Gensler and the SEC were rational, they would have moved on from this case long ago…While we’ll fight in court for as long as we need, let’s be clear: XRP’s status as a non-security is the law of the land today.”
Additionally, Chief Legal Officer Stuart Alderoty has also said on a post, “SEC’s decision to appeal is disappointing but not surprising.”
As of this writing, XRP is currently trading at $0.554, registering a decline of 7.7%. XRP’s token has also dipped by 20% in the wake of this announcement.
SEC Appeal Casts Shadow Over Potential XRP ETF Approval
As Cryptopolitan reported, Bitwise recently filed an application for the first-ever spot XRP ETF. The appeal process is anticipated to hold any possible listing or trading of XRP-linked financial assets, including the Bitwise ETF. In a recent post on X, Alex Thorn, Head of Research at Galaxy Digital, noted that an SEC appeal would be very unfavorable to an XRP ETF and put the chances at “near zero.”
SEC has until next week (Oct. 7) to appeal Judge Torres’ July 2023 ruling (which held that secondary sales of XRP through exchanges were not securities)
likelihood of this ETF filing succeeding drops to near zero if they do appeal (i’ll be very surprised if they don’t appeal) https://t.co/FBGVZPNvwV
— Alex Thorn (@intangiblecoins) October 1, 2024
The Bitwise spot XRP ETF was expected to give institutional and retail investors exposure to XRP through a regulated financial product.
