SEC Files Last-Minute Appeal in Ripple Lawsuit Seeking to Overturn Summary Judgment

SEC Files Last-Minute Appeal in Ripple Lawsuit Seeking to Overturn Summary Judgment

The U.S. Securities and Exchange Commission (SEC) has officially filed a Civil Appeal Pre-argument statement known as Form C in its ongoing legal battle against Ripple Labs. This last-minute appeal aims to challenge U.S. District Judge Analisa Torres’ summary judgment from July 2023, which ruled in favor of Ripple regarding the classification of its XRP token.

According to Fox Business journalist Eleanor Terrett, the SEC's filing outlines specific issues it intends to contest in the Ripple case. Key points of contention include Ripple's programmatic sales of XRP on digital asset trading platforms and personal sales conducted by Ripple executives, specifically CEO Bradley Garlinghouse and co-founder Christian Larsen. The SEC's initial lawsuit alleged that these transactions violated the Securities Act of 1933 due to the lack of proper registration for the sales of XRP.

The Form C will also address Ripple's distribution of XRP to employees and others, although it notably does not seek to contest the $125 million monetary penalty imposed by Judge Torres or the decision not to grant disgorgement of profits.

Speculation arose within the crypto community regarding whether the SEC had missed the deadline for filing its appeal, given that the appellate timeline was set for October 16. In an interview with Fox Business, Ripple's Chief Legal Officer Stuart Alderoty indicated that the SEC had until October 17 to file Form C, which would provide more clarity on the issues being appealed.

Legal expert and pro-crypto lawyer James 'MetaLawMan' Murphy commented on the situation, noting the unusual timing of the SEC’s appeal, which was dated October 16 but stamped by the court on October 17. Terrett initially expressed disbelief that the SEC would allow such an important deadline to pass without action. However, she later updated her report, stating that a spokesperson for Ripple confirmed that the appeal is proceeding as expected and that the relevant documents will be publicly filed soon.

In July 2023, Ripple achieved a partial victory when the court determined that XRP sales on digital trading platforms do not constitute securities. However, the court ruled that Ripple’s sales of XRP to institutional investors were indeed unregistered securities. Following this ruling, on August 7, Judge Torres ordered Ripple to pay civil penalties totaling $125,035,150 for the violations.