Ripple vs. SEC: Latest Filing Puts Regulator On The Attack With Crypto Firm


Ripple Labs filed a Form C cross-appeal in the US Court of Appeals for the Second Circuit to address major SEC case issues. This brief challenges a prior finding that classed some XRP transactions to institutional investors as securities and specifically addresses the SEC's October 16 appeal of Ripple's favorable district court verdict earlier this year.

In a post on X, Ripple Chief Legal Officer Stuart Alderoty confirmed the Form C cross-appeal, which has garnered attention from the legal and cryptocurrency communities. He expects the lawsuit to be less dramatic than before. The Appeals Court may only evaluate the record, so the SEC cannot present fresh evidence or require Ripple to provide more.


The appeal requests for a de novo examination of all case issues, including whether Ripple's XRP transactions are securities under the Howey test. A 1946 Supreme Court judgment established the Howey test to evaluate whether a transaction is an investment contract by considering characteristics including money invested and seller gains.

A de novo study might have major repercussions since it wants a new look at these complicated problems and how they apply to cryptocurrencies and other business features.


The XRP market cap is $29.1 billion. Chart: TradingView Difficult SEC Cryptocurrency Regulation Position
Ripple's Form C filing also addresses the SEC's imprecise and conflicting remarks on digital asset securities rules. SEC has long contended that selling XRP is a security, forcing Ripple to observe federal securities laws. But Ripple's recent Form C filing shows how unclear SEC compliance is for the crypto sector.

Using the Howey test, the court ruled that XRP sales to the public were not securities. It also found that early XRP sales to institutional investors were unregistered securities offers, ordering Ripple to pay a $125 million civil penalty.

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