Ripple, a San Francisco-based company specializing in cryptocurrency payments, has officially filed a cross-appeal against the SEC in order to ensure that all aspects of their case are thoroughly reviewed. The company submitted its cross-appeal notice in the U.S. District Court of New York yesterday, seeking a review of the court’s final judgment entered on August 7, 2024. This development was shared by renowned defense lawyer James K. Filan in a recent post.
The decision to file a cross-appeal comes on the heels of the SEC’s own official appeal of the Ripple decision, marking a new phase in the ongoing legal battle between the two entities. The original judgment saw both the SEC and Ripple achieve partial victories, with the court ruling that Ripple had violated securities laws through its institutional sales of XRP, while also declaring that the company’s programmatic sales and other distributions of the token are not considered investment contracts.
As a result of the court’s ruling, Ripple was ordered to pay a $125 million fine for violating securities laws, and was also subjected to an injunction on its future institutional sales, requiring the company to seek the SEC’s permission before conducting such transactions.
Ripple’s cross-appeal notice indicates the company’s dissatisfaction with the court’s verdict on its institutional sales of XRP, and its intent to challenge the decision in the U.S. Court of Appeals. Both Ripple and the SEC are seeking an appellate review of the original judgment, with the expectation that both appeals will be combined into a single case in the Second Circuit.
Stuart Alderoty, Chief Legal Officer of Ripple, hinted at the company’s strategy in response to the SEC’s appeal, stating that Ripple aims to ensure that “nothing is left on the table.” He emphasized the argument that an investment contract cannot exist without a contractual agreement outlining the rights and obligations between the parties, particularly in relation to Ripple’s institutional sales of XRP.
Alderoty also provided insights into what the crypto community can expect from the SEC’s appeal brief, noting that while the SEC might not challenge the ruling that XRP is not a security, it may contest the decision on Ripple’s programmatic XRP and other distributions to employees and developers. Despite the regulator’s potential challenges, Alderoty expressed confidence that the SEC would ultimately lose in this legal battle.
In response to these developments, Ripple CEO Brad Garlinghouse expressed frustration with the SEC and its chair Gary Gensler, criticizing the commission for its disruptive actions within the crypto industry. He emphasized that the SEC’s focus should be on providing clarity rather than creating chaos, and expressed hope that Ripple’s cross-appeal would bring an end to the SEC’s regulatory approach.
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