- The SEC has filed a late appeal in its lawsuit against Ripple, targeting the company’s programmatic XRP sales and the involvement of executives, Brad Garlinghouse and Chris Larsen.
- While the court previously ruled XRP is not a security in retail transactions, this appeal focuses on specific actions, raising further uncertainty about Ripple’s legal standing.
The long-running legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to unfold with a surprising new twist. After missing its initial deadline, the SEC has filed a last-minute appeal targeting Ripple’s programmatic sales of XRP, as well as the actions of key executives, Brad Garlinghouse and Chris Larsen. This move has reignited questions about the agency’s regulatory approach to the crypto industry and the potential implications for XRP’s status.
Ripple’s Legal Journey: The Background
The SEC’s ongoing lawsuit against Ripple initially centered on whether XRP, Ripple’s native cryptocurrency, should be classified as a security under U.S. law. A landmark court ruling earlier this year declared that XRP was not a security in retail transactions, giving Ripple a significant legal victory. However, the SEC’s latest appeal doesn’t challenge this broader ruling; instead, it zeroes in on specific programmatic sales of XRP and the role of the company’s executives in those transactions.
Ripple’s Chief Legal Officer, Stuart Alderoty, was quick to point out that the security status of XRP should no longer be up for debate, signaling confidence in the company’s legal standing. Despite this, the SEC’s new angle of attack has kept both the crypto community and Ripple’s executives on high alert.
A Narrower, Yet Significant, Appeal
The SEC’s decision to focus its appeal on Ripple’s programmatic sales has raised eyebrows. By narrowing its legal argument, the agency seems to be betting on a more targeted approach, rather than revisiting XRP’s overall status in retail markets. It also accuses Garlinghouse and Larsen of actively aiding in XRP’s distribution through sales and other transactions, which complicates matters for Ripple’s leadership.
But critics, including many in the cryptocurrency community, are questioning the SEC’s strategy. The SEC’s reliance on enforcement actions rather than creating clear regulatory guidelines has been a point of contention. The legal uncertainty that follows has led to growing skepticism about the agency’s ability to create coherent crypto policies. This isn’t the first time the SEC has been criticized for its approach, as similar issues have surfaced in its ongoing disputes with other major crypto platforms like Binance, Coinbase, and Kraken.
Procedural Delays and Community Reactions
Adding to the confusion is the fact that the SEC’s appeal was filed past its initial deadline of October 16. The delay, which seems to have resulted from procedural issues involving the SEC’s Form C filing, has led to speculation about whether the agency’s case was weakened by this misstep. Nonetheless, the court accepted the SEC’s appeal the following day, allowing the lawsuit to continue.
While Ripple’s leadership remains confident, the crypto community is watching closely. Many feel that the SEC’s case lacks focus, while others are concerned about the ripple effects (pun intended) this could have on the broader crypto industry. The legal battle, already years in the making, now enters another critical phase, with the fate of XRP still hanging in the balance.
Conclusion: What’s Next for Ripple and the SEC?
The SEC’s last-minute appeal has introduced fresh uncertainty into an already complex legal battle. While Ripple may have scored an earlier victory with the court’s ruling on retail transactions, the SEC’s focus on programmatic sales and executive involvement could still pose significant challenges. As the crypto world watches closely, one thing is certain: this is far from the end of the Ripple-SEC saga.
