SEC Files Notice of Appeal in Case Against Ripple
A federal judge ruled last year that the SEC had not made its case that Ripple violated securities law by selling XRP to retail customers through exchanges.
by Nikhilesh De
Updated Oct 3, 2024, 5:22 p.m. Published Oct 2, 2024, 9:25 p.m.
The U.S. Securities and Exchange Commission announced it would appeal a federal judge's ruling in its case against Ripple on Wednesday.
The federal regulator filed a "notice of appeal" to the Second Circuit Court of Appeals, just under two months after Judge Analisa Torres imposed her final judgement in the regulator's now four-year-old-case against the crypto company.
In July 2023, the judge ruled that while Ripple violated federal securities law through its institutional sales of XRP, its programmatic sales to retail exchanges did not violate securities rules. The SEC attempted to file an interlocutory appeal against the motion for summary judgement, but was denied by the judge.
This past August, Judge Torres imposed a $125 million fine against Ripple, well below the nearly $2 billion the SEC requested in disgorgement, prejudgment interest and civil penalties. The judge stayed enforcement of this fine until after the SEC's deadline to file an appeal had elapsed or an appeal had been resolved by the circuit court.
In a statement, an SEC spokesperson said, "We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit."
After this article's publication, a Ripple spokesperson referred CoinDesk to tweets by CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty.
"[The SEC] lost on everything that matters," Garlinghouse tweeted. "Ripple, the crypto industry and the rule of law have already prevailed ... XRP's status as a non-security is the law of the land today."
Alderoty called the appeal "disappointing, but not surprising."
In an interview in August, Alderoty told CoinDesk he expected the regulator to have a tough time convincing an appeals court to overturn a district court judge's ruling.
"Even if they do appeal, I would just tell everyone 'take a deep breath,'" he said at the time.
While the SEC filed its notice of appeal, it hasn't filed the appeal itself yet (in other legal proceedings like Sam Bankman-Fried's criminal case, the actual appeal has been filed months after the notice of appeal).
Earlier Wednesday, Bitwise filed an application to list and trade shares of an exchange-traded fund that would invest in XRP.
UPDATE (Oct. 2, 2024, 21:35 UTC): Adds additional detail.
UPDATE (Oct. 2, 22:05 UTC): Adds Garlinghouse, Alderoty tweets.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. When he's not reporting on digital assets and policy, he can be found admiring Amtrak or building LEGO trains. He owns < $50 in BTC and < $20 in ETH. He was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
