Days before the deadline, the SEC filed an appeal against the court ruling that declared XRP as not a security, reigniting its legal battle with Ripple Labs just after the departure of its Enforcement Director, Gurbir Grewal.
Appeal Against XRP Ruling
The U.S. Securities and Exchange Commission (SEC) has filed a notice of appeal against the ruling in its legal battle with Ripple Labs concerning the status of XRP as a security. This move comes after Judge Analisa Torres ruled against the SEC’s claims in August, marking a significant development in the high-profile case.
This could further complicate the legal proceedings, especially as it comes just hours after Bitwise, an asset manager, filed an S-1 registration for an XRP exchange-traded fund (ETF). The SEC’s appeal may now delay the approval of such products, casting uncertainty over the future of XRP in financial markets.
Appeal Following Departure of Enforcement Director
The SEC’s decision to appeal comes on the heels of the announcement that Gurbir Grewal, the agency’s Enforcement Director, will step down from his role on October 11. Grewal, who has overseen the SEC’s enforcement actions for the past three years, has been a central figure in numerous crypto-related cases, including those against Ripple and Coinbase. During his tenure, the agency secured over $20 billion in penalties across 2,400 enforcement actions, many of which targeted the crypto industry. The crypto community was heralding his departure to be a positive indication of good things to come, but the recent development proves otherwise.
Ripple’s Victory Faces New Legal Challenge
Judge Torres’s ruling in August was a key victory for Ripple Labs, with the court concluding that XRP does not constitute a security under U.S. law. Ripple was ordered to pay $125 million in civil penalties, significantly lower than the $2 billion originally sought by the SEC. Even though the court issued a permanent injunction preventing Ripple from violating securities laws regarding XRP sales in the future, it did not find any evidence of fraud or misconduct by Ripple.
This ruling was widely regarded as a win for Ripple and the broader cryptocurrency community, but the SEC’s appeal signals its intention to continue the legal fight. The regulator has filed the appeal with the U.S. Court of Appeals for the Second Circuit, just days before the deadline to do so.
Ripple’s Response to SEC’s Appeal
Ripple Labs CEO Brad Garlinghouse was quick to respond to the SEC’s decision.
In a post on X (formerly Twitter), he remarked,
“If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.”
Garlinghouse further emphasized that the crypto industry and the rule of law had already prevailed, calling the SEC’s continued pursuit of the case misguided.
Stuart Alderoty, Ripple’s Chief Legal Officer, hinted that the company may file a cross-appeal in response to the SEC’s notice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
