Skip to content

SEC to Challenge Ripple's Victory in XRP Case: An In-Depth Look at the Appeal

The U.S. Securities and Exchange Commission (SEC) is set to appeal a recent ruling in the case against Ripple concerning its sales of XRP, launching a complex legal battle. Here's an overview of the unfolding situation.

Flag of SEC
Flag of SEC

Federal Judge's Controversial Decision on Ripple's XRP Sales

A federal judge ruled last month that while Ripple's direct sales of XRP to institutional investors violated securities law, its programmatic sales to retail investors through exchanges did not. Judge Analisa Torres of the U.S. Southern District Court tentatively scheduled a trial for other issues that she did not rule on during the motions for judgment for the second quarter of 2024.

SEC's Announcement to File Interlocutory Appeal

The U.S. Securities and Exchange Commission (SEC) will file an "interlocutory appeal" of a judge's ruling on Ripple's programmatic sales of XRP, the regulator said in a court filing on Wednesday. The SEC is seeking "leave to" appeal part of the recent decision while other parts of the SEC's case proceed to trial, potentially preventing the need for two trials.

Details of the SEC's Appeal Against Ripple's XRP Sales

Specifically, the SEC aims to certify the court's holding that Defendants' 'Programmatic' offers and sales to XRP buyers over crypto asset trading platforms, and Ripple’s 'Other Distributions' in exchange for labor and services, did not involve the offer or sale of securities under the Howey test, according to the SEC's filing.

In its filing, the SEC noted that Ripple will have to respond by Aug. 16, 2023 (a week from the letter's filing), and proposed filing an opening brief laying out the appeal on Aug. 18. Ripple would have two weeks to respond, and the SEC would have another week to reply to Ripple if the judge signs off on the filing.