SEC Seeks Reconsideration in Ripple Case

The United States Securities and Exchange Commission (SEC) has taken steps to appeal previous court decisions regarding the distribution of Ripple’s XRP token.

#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed the Civil Appeal Pre-Argument Statement (Form C) with attachments.https://t.co/LpSFIjMZhC

— James K. Filan ???? (@FilanLaw) October 17, 2024

The agency submitted a Civil Appeal Pre-Argument Statement (Form C).

In December 2020, the SEC filed a lawsuit against Ripple, accusing the company of selling unregistered securities in the form of XRP worth $1.3 billion. The defendants also included CEO Brad Garlinghouse and co-founder Chris Larsen.

In July 2023, Judge Analisa Torres of the Southern District of New York ruled that programmatic sales and other distributions of Ripple’s token did not constitute an offer and sale of investment contracts. However, the decision stated that sales of the coins to large players violated U.S. securities laws.

The court dismissed the SEC’s interlocutory appeal, finding insufficient evidence and noting that its consideration would not “materially advance the ultimate termination of the litigation.”

Subsequently, the Commission withdrew its lawsuit against Garlinghouse and Larsen. The parties reached a settlement, eliminating further charges on previous grounds.

In August 2024, Judge Torres issued a final ruling in the case, fining Ripple $125 million. The regulator had initially sought $2 billion. In October, the SEC contested the verdict.

In the submitted Form C, the agency requests a review of the court’s previous decisions, citing erroneous application of the law. This pertains to the offers and sales of XRP on digital asset platforms, the involvement of Garlinghouse and Larsen, and the distribution of the token “in exchange for consideration other than cash.” 

“These issues should be reviewed de novo [anew],” the statement reads.

Ripple’s chief legal officer, Stuart Alderoty, noted that the SEC’s move was not unexpected, and the company will file its Form C next week.

No surprises here — once again it’s been made clear. The Court’s ruling that “XRP is not a security” is NOT being appealed. That decision stands as the law of the land.

Stay tuned for Ripple’s Form C to be filed next week. https://t.co/m9molUGSBv

— Stuart Alderoty (@s_alderoty) October 18, 2024

“The Court’s ruling that XRP is not a security is not being appealed. That decision stands as the law of the land,” he emphasized.

Earlier, Alderoty had expressed similar confidence amid potential appeals against Torres’s final order in the case.