SEC Appeals Ripple Judgment

The U.S. Securities and Exchange Commission (SEC) has taken further steps in its legal dispute with Ripple Labs by filing a "Civil Appeal Pre-Argument Statement," also known as Form C, late Thursday.

The SEC aims to assess potential errors made by the U.S. District Court for the Southern District of New York regarding Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. They request a "de novo" review, which involves re-examining how the law was applied in the original decision.

The issues under review include:
– Whether the district court erroneously granted partial summary judgment favoring defendants concerning Ripple’s offers and sales of XRP on trading platforms, and Garlinghouse’s and Larsen’s perceived aiding in those sales;
– Garlinghouse’s and Larsen’s personal XRP offers and sales;
– Ripple's distribution of XRP for non-cash considerations.

Ripple's Chief Legal Officer, Stuart Alderoty, responded on X, stating that Ripple intends to file its Form C next week and emphasized that the ruling declaring that "XRP is not a security" was not being appealed. He said, “That decision stands as the law of the land.”

The SEC initially appealed on October 2, asserting that the district court's decision conflicts with established Supreme Court effects on securities laws, expressing eagerness to present its case to the Second Circuit.

Ripple soon filed a cross-appeal to cover all bases, arguing that a valid 'investment contract' requires essential rights and obligations. In 2020, the SEC accused Ripple of raising $1.3 billion by selling XRP, claiming it was an unregistered security. Last year, Judge Analisa Torres ruled that some programmatic sales of XRP were lawful, while others to institutional investors were not. The court also ordered Ripple to pay $125 million in fines.

The SEC's earlier attempt to secure an interlocutory appeal was rejected by Judge Torres, who stated it did not sufficiently demonstrate that it would materially advance the resolution of the case.