Ripple Fights Back with CrossAppeal Against SEC Ruling Leaving No Stone Unturned

Ripple, a San Francisco-based company specializing in crypto payments, has officially filed a cross-appeal against the SEC in order to leave no stone unturned.
The company submitted its cross-appeal notice in the U.S. District Court of New York yesterday, seeking a review of the court’s final judgment entered on August 7, 2024. This development was shared by renowned defense lawyer James K. Filan in a post.
Ripple’s cross-appeal notice comes on the heels of the SEC’s official appeal of the Ripple decision.
Recap of the Ripple Judgment
In the summary and final judgments, both the SEC and Ripple secured partial victories. The court ruled that Ripple violated securities laws through its institutional sales of XRP, but also declared that the company’s programmatic sales and other distributions of the token are not investment contracts.
As a result, the court imposed a fine of $125 million on Ripple for violating the law through its institutional sales and placed an injunction on the company’s future institutional sales, requiring them to seek the SEC’s permission before conducting these transactions.
Ripple’s cross-appeal notice indicates the company’s dissatisfaction with the court’s verdict on its XRP-related institutional sales and its intention to seek an overturn in the U.S. Court of Appeals.
Combining Appeals in the Second Circuit
Both Ripple and the SEC are seeking an appellate review of Judge Analisa Torres’ verdict, with expectations that both appeals will be combined into a single case in the Second Circuit.
Ripple’s Goal to Leave No Stone Unturned
While Ripple has not yet filed its official cross-appeal brief, the company’s CLO Stuart Alderoty provided a glimpse of what crypto enthusiasts can expect. He stated that the SEC appealed Judge Torres’ decision because it lost on all key aspects of the case, while Ripple is cross-appealing to ensure “nothing is left on the table.”
The company’s appeal will focus on the argument that an investment contract cannot exist without a contractual agreement outlining the rights and obligations between the parties, particularly relating to Ripple’s institutional sales of XRP, which Judge Torres declared a security.
Potential SEC Appeal Brief
Alderoty also discussed what to anticipate from the SEC’s appeal brief, noting that the SEC had confirmed it would not appeal Judge Torres’ ruling that XRP is not a security and apologized for suggesting in another case that a token itself can be a security.
While the SEC may not appeal XRP’s non-security status, Alderoty believes the regulator might challenge the decision on Ripple’s programmatic XRP and other distributions to employees and developers, even though Judge Torres ruled that these transactions are not investment contracts.
Ripple CEO’s Reaction
In response to the developments, Ripple CEO Brad Garlinghouse expressed frustration with the SEC and its chair Gary Gensler, stating that the commission should not have appealed if they cared about the crypto industry. He added that the SEC is only focused on creating havoc rather than providing clarity.
Following Ripple’s cross-appeal, Garlinghouse remarked that the company hopes to seal the SEC’s fate and end its regulation-by-enforcement agenda.
In conclusion, the Ripple CLO suggested that the company is anticipating the appellate court to end the SEC’s misguided attack on the crypto industry.
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