Ripple Fights Back: Appeal Challenges SEC’s XRP Ruling
In a recent turn of events, Ripple Labs has officially filed an appeal against the US Securities and Exchange Commission (SEC), contesting their recent ruling on XRP.
Today, Ripple filed a Form C – listing the issues we plan to raise on our cross appeal. A few things to keep in mind as we move forward:
The case is not about whether XRP, in and of itself, is a security. XRP is uniquely situated as having clarity (alongside BTC) in not being… https://t.co/AmFocAnbPx
— Stuart Alderoty (@s_alderoty) October 25, 2024
What’s the Fuss About?
Back in August, a US court slapped Ripple with a hefty $125 million fine, claiming that their sales of XRP to big investors (like institutions) were illegal because they counted as securities. But Ripple isn’t taking this lying down. They’re arguing that these sales shouldn’t be considered securities, and they’re taking the fight to a higher court.
The “Howey Test” and Why it Matters
At the heart of this legal battle is something called the “Howey Test.” It’s basically a checklist that courts use to figure out if something is an “investment contract” (and therefore a security). Ripple is arguing that the court got it wrong when they applied this test to their XRP sales.
Ripple’s Strategy: A Fresh Look
Ripple is asking the appeals court for a “de novo” review. Think of it like hitting the reset button. This means the court will take a fresh look at the case without being biased by the previous court’s decision.
SEC’s Appeal: A Different Focus
Interestingly, the SEC is also appealing part of the original ruling. They’re not challenging the decision that XRP is not a security when sold on regular crypto exchanges. Instead, they’re focusing on those institutional sales to big investors.
What’s Next?
Ripple’s chief legal officer, Stuart Alderoty, seems pretty confident about winning this appeal. He even called the SEC’s tactics “background noise” now. It looks like this legal showdown is far from over, and the outcome could have a major impact on the future of XRP and the crypto world as a whole.
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