Ripple Labs Appeals Filing

Ripple Labs submitted its Form C filing on Thursday as part of the continued legal dispute with the U.S. Securities and Exchange Commission (SEC).

Form C Overview

Form C is a pre-argument statement for civil appeal, detailing the specific grounds for Ripple’s challenge to the previous ruling from the Southern District of New York court.

In the filing, Ripple requests the appeals court to apply a “de novo” standard, meaning it seeks a re-examination of the decision concerning how the law was applied.

Key Appeal Subjects

One major appeal point is the district court’s application of the Howey test regarding Ripple’s XRP transfers, classifying them as securities transactions in institutional sales. This is rooted in the idea that these transfers were investments of money in a common enterprise with an expectation of profit solely from Ripple's efforts.

Another point of contention is whether the court took into account Ripple’s lack of fair notice, highlighting the SEC’s inconsistent and vague statements on federal securities laws.

Ripple's appeal also seeks to define the “essential ingredients” necessary for a transaction to be classified as an investment contract and to reassess the SEC’s injunction against Ripple.

Stuart Alderoty, Ripple's Chief Legal Officer, stated on X, “The Appeals Court reviews the record that has already been set … and we have a great record. The SEC can’t submit new evidence or ask us to produce more. Meaning, there won’t be all the drama we had in the litigation when we fought over documents.” Alderoty noted that XRP has been recognized as a non-security, with the SEC not challenging this classification.

Recent SEC Activity

Ripple’s Form C follows the SEC’s pre-argument statement, where the agency requested a reassessment of the district court's decision in favor of Ripple concerning XRP's offers and sales on trading platforms. The SEC has not yet responded to The Block's request for comments.

Overview of Ripple v. SEC

The legal battle between Ripple and the SEC started in 2020 when the agency accused Ripple of raising $1.3 billion through XRP sales, deeming them unregistered securities.

In a ruling from the Southern District of New York, Judge Analisa Torres determined that some of Ripple’s programmatic XRP sales did not violate securities laws due to their blind-bid process. However, she ruled that direct sales to institutional investors did constitute securities. In August, Judge Torres ordered Ripple to pay a $125 million fine, significantly lower than the SEC's proposed $2 billion penalty.

Alderoty emphasized that the SEC’s broader strategy aims to create confusion for Ripple and the cryptocurrency industry, stating, “But honestly, it’s just background noise now. The hard part of the fight is behind us.”