The U.S. Securities and Exchange Commission (SEC) has filed an appeal in the Ripple case, but notably, the appeal does not challenge the court's ruling that XRP is not classified as a security.
SEC's Appeal Focuses on Ripple Executives' Sales
On Wednesday, the SEC submitted a Form C appeal requesting judicial review of specific aspects of the July 2023 summary judgment favoring Ripple Labs.
Ripple's Chief Legal Officer, Stuart Alderoty, clarified via social media that the SEC's appeal does not dispute the court's determination regarding XRP's status, emphasizing that the ruling remains "the law of the land." Ripple is set to file its own Form C response next week.
Key points of the SEC’s appeal include:
- Allegations that Ripple executives Brad Garlinghouse and Chris Larsen sold XRP, potentially aiding Ripple in violating securities laws.
- A request to re-examine the court’s ruling on XRP sales via exchanges and personal sales by executives.
Legal Battle Extends Into 2025
The legal clash between Ripple and the SEC is expected to continue, with briefing likely stretching into April 2025. Both parties are preparing for further litigation.
Penalties and Settlements
As part of the prolonged case:
- Ripple was fined $125 million for institutional sales violating federal securities laws.
- The penalty was significantly lower than the SEC’s initial demand of $1.98 billion (disgorgement + civil penalty).
Judge Torres reiterated her stance that Ripple’s programmatic XRP sales to retail clients via exchanges did not breach securities laws. The SEC’s prior attempt to appeal this aspect was unsuccessful.
Background on Ripple Executives' Case
In July, a federal judge allowed a civil securities lawsuit against Ripple Labs to proceed, denying the company’s request for summary judgment in a case involving CEO Brad Garlinghouse.
Allegations stem from a 2017 interview where Garlinghouse claimed to hold "very, very much" XRP, while reportedly selling "millions of XRP" that year—a contradiction plaintiffs argue was misleading.
FAQs
1. Does the SEC’s appeal challenge XRP’s non-security status?
No. The appeal focuses on Ripple’s institutional sales and executive conduct, not XRP’s classification.
2. What’s next in the Ripple vs. SEC case?
Both parties will file briefs, with proceedings likely extending to mid-2025.
3. How much was Ripple fined?
Ripple agreed to a **$125 million** penalty, far below the SEC’s original $1.98 billion request.
4. Were Ripple’s retail XRP sales deemed legal?
Yes. Judge Torres ruled programmatic sales to retail investors complied with federal laws.
5. What’s the status of Brad Garlinghouse’s personal case?
The lawsuit continues after a judge denied Ripple’s motion for summary judgment.
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