The US SEC’s new appeal seeking to reverse a part of the Southern District of New York’s recent judgment has riled the XRP community. The US regulator’s decision to appeal the highly-publicized SEC vs. Ripple case seeks to reverse U.S. District Judge Analisa Torres’s judgment more than a year ago.
In an X post, Fox Business journalist Eleanor Terrett stated that the US Securities and Exchange Commission (SEC) had filed an appeal in the recently concluded SEC vs. Ripple case. Terrett revealed that a spokesperson from the regulator has indicated that the appeal was “proceeding normally, and the documents will be filed publicly soon.” The journalist was most likely referring to Form C, which the SEC was expected to file from October 16 to beat an official deadline of October 18. Based on the timeline, the regulator has beaten the deadline by submitting Form C to the U.S. Court of Appeals for the Second Circuit.
Negatively Affect Launch of XRP ETF
Reacting to the decision to attempt to reverse Ripple’s win, Ripple Labs’ CEO Brad Garlinghouse stated in an X Post that he wasn’t surprised. According to Garlinghouse, it was ironic that the regulator had chosen to proceed with what it refers to as normalcy when it was responsible for making its own rules regarding emerging events. Considering the instabilities associated with SEC appeals, users within the XRP community are apprehensive that SEC’s new appeal could negatively affect XRP’s plans. Some experts fear attempting to reverse XRP’s win could negatively impact Bitwise’s recent decision to apply for the launch of an XRP exchange-traded fund (ETF).
While SEC’s new appeal doesn’t come as a surprise since it has somehow been expected, XRP community members took to social media to criticize what looks like a last-minute decision by the agency that appeared like it was going to miss the 14-day window available for filing Form C. In terms of the appeal court procedures, an appellant uses Form C to provide information about their intention to appeal a decision by a lower court. Appellants must file Form C within 14 days of filing their notice of appeal, which the SEC had done on October 2.
Never-Ending Legal Dispute
SEC’s new appeal is targeting a decision by the Southern District of New York regarding the offer for the sale of Ripple on crypto trading platforms in addition to personal sales by Ripple Labs’ CEO Brad Garlinghouse and Christian Larsen, where the court ruled the sales never constituted a securities violation. The SEC is also appealing the court’s ruling that by distributing XRP tokens in crypto platforms for non-cash considerations, Ripple did not breach securities laws.
The US Southern District court had previously found that the decision by Ripple Labs to sell XRP to large investors violated the securities law and fined the firm $125 million in civil penalties. The seemingly never-ending legal dispute in the SEC vs. Ripple case revolves around whether XRP is a security. The SEC’s new appeal is likely to extend the duration of the case, and there are chances it could drag on beyond 2025 and even 2026. As both parties will seek to present their positions fully, there’s a fear that the extended time periods could negatively affect XRP’s market performance.
Conclusion
The decision to reignite the legal tussle over whether XRP sales can be classified as securities dates back to July 2015. The lawsuit charged that Ripple Labs had breached portions of the SEC’s Act of 1933 by offering XRP tokens for sale without proper registration.
In the SEC’s new appeal, the regulator is seeking clarification and a “de novo” review of the SC vs. XRP case. The agency contends that the US District Court for the Southern District of New York erred in its past determination and would like the court to review its decision based on questions about how the law was implemented.
