Ripple Labs will oppose the United States Securities and Exchange Commission’s appeal of the court ruling stating retail XRP sales do not violate securities laws.
Ripple CEO Brad Galinghouse took to X post on October 3 to announce their intention to fight back against the SEC appeal and protect XRP’s status as non-security. Calling it misguided and infuriating, Ripple executive wrote.
“These individuals still haven’t learned their lesson: Ripple, crypto trading platforms, and law have already triumphed.
On October 2, the Securities and Exchange Commission filed an appeal to overturn a ruling by the Southern District Court of New York, which concluded that XRP cannot be considered a security.
As was announced by Judge Analisa Torres on July 13, she determined that sales of XRP to retail investors did not constitute illegal securities offerings and did not meet Howey’s test requirements as securities.
Ripple Labs’ institutional offerings were found to violate similar laws due to how sales were conducted, prompting the SEC to propose a $1.95 billion penalty against Ripple Labs.
Judge Torres reduced Ripple’s penalty from $275 million to $125 million while ordering them to register with the SEC if they plan on offering securities in the future.
On September 4, both parties agreed to a stay order in which Ripple would deposit 111% of its $125 million fine into a secure account until any appeal proceedings had been concluded. This agreement effectively postponed payment while signaling to both Ripple and SEC that their intent to appeal the ruling had not changed.
Ripple’s chief legal officer, Stuart Aldertoy, expressed no surprise in the commission’s decision to file an appeal, as he criticized both Gary Gensler, its current chairman, and their agency’s approach, which involved engaging in what he termed as litigation warfare against crypto industry players.
Alderton wrote on October 3 in an X post that this further embarrasses the agency, adding that blockchain payment firms will opt for cross-appeals if needed.
Fred Rispoli of Hodl Law speculated that this process might take an extended amount of time, noting that an appeals court ruling from the Second Circuit likely wouldn’t come before January 2026 and, more likely, March or April.
Gensler recently came under fire from U.S. lawmakers over the SEC’s aggressive enforcement action strategy towards the crypto sector. At a congressional hearing, she was heavily criticized for coining terms like “crypto asset security” and the agency’s lack of clarity when dealing with digital assets like Ethereum.
Ripple remains committed to expanding globally despite legal hurdles, and it recently received in-principle approval in Dubai.
