Ripple Continues to Fight SEC Appeal of XRP Status
Date: 2024-10-03 Author: Henry Casey Categories: BUSINESS
On October 3, Ripple CEO Brad Garlinghouse announced in a post on X that the company would fight the SEC as long as it takes to confirm XRP’s status as a non-security. He described the appeal as “misguided and vexing,” adding, “They still don’t get it: They’ve lost on all the key points. Ripple, the crypto industry, and law enforcement have already won.”
The SEC filed an appeal on October 2 to challenge the ruling by the U.S. District Court for the Southern District of New York that XRP cannot be classified as a security.
On July 13, Judge Analisa Torres ruled that the sale of XRP to retail investors did not constitute an illegal offering of securities, and the token itself did not meet the definition of a security under the Howey Test.
Regardless, Ripple’s institutional offerings were found to be in violation of the law, leading to the SEC’s proposed $1.95 billion fine on Ripple Labs. Judge Torres reduced the fine to $125 million and ordered the company to register with the SEC if it intends to offer securities in the future.
Subsequently, on September 4, the two sides agreed to a temporary settlement in which Ripple would deposit 111% of the fine into a custodian account pending appeal. The decision delayed the payment and made clear the SEC’s intention to appeal.
Ripple Chief Legal Officer Stuart Aldertoye called the SEC’s decision to appeal “unsurprising” and criticized the agency for waging a “litigation war” against the crypto industry. In his October 3 post, he added that Ripple would cross-appeal if necessary.
Hodl Law founder Fred Rispoli suggested that the process could be drawn out, with a decision from the Second Circuit unlikely to come until January 2026, more likely in March or April 2026.
Meanwhile, SEC Chairman Gary Gensler has faced criticism from U.S. lawmakers for his hard-line approach to the crypto industry. He was criticized at a recent congressional hearing for coining vague terms like “crypto asset security” and for using vague language around digital assets like Ethereum.
Despite the legal hurdles, Ripple continues to aggressively expand into international markets, recently receiving preliminary approval in Dubai.
