SEC Didn’t Appeal Key XRP Ruling, But That’s Not the End of the Story

Stuart Alderoty, Ripple’s chief legal officer, confirmed that the U.S. Securities and Exchange Commission is not appealing the court’s ruling that XRP is not a security.

The attorney’s comment came in response to news that the SEC had filed a Form C civil appeal. Ripple lawyer James K. Filan confirmed that the SEC had indeed filed documents with the Court of Appeals.

No surprises here; It became clear once again. THE court’s decision that “XRP is not a security” is NOT objected to. This decision stands as the law of the land.

Stay tuned for Ripple’s Form C filing next week. https://t.co/m9molUGSBv

— Stuart Alderoty (@s_alderoty) 18 October 2024

Form C, (“Notice of Preliminary Discussion of Legal Appeal”) is a document in which the SEC states its intention to appeal certain legal decisions made in a case. In the Ripple case, the SEC asked the court to review the application of the law in the earlier summary judgment. This means that the judge will analyze the legal aspects of the case, not just the final decision.

In the claim, the regulator asked for a reconsideration of the court’s decision to sell the Ripple (XRP) token on exchanges, as well as the personal sale of the token by Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.

Ripple is preparing to file its own cross-appeal to challenge the ruling on institutional sales, and both parties are bracing for a lengthy process that could change the way digital assets are classified and regulated in the future. Alderoty urged Ripple to monitor Form C filings this week.

How did XRP react?

According to the latest news about the case, the price of XRP remains relatively stable. The price of the asset increased by 1.74% last week. At the time of writing, XRP is trading at $0.5468.

Source: crypto.news

The token gained 0.59%, hurting overall crypto market growth, reaching a capitalization of $2.36 trillion in 24 hours.

SEC and Ripple disputes will continue until next year

According to Alderoty, the case could extend until July 2025. In a conversation with Fox Business correspondent Eleanor Terrett, he noted that the crypto project will also file a Form C application in which it will outline arguments for a counter-objection.

The SEC will have 90 days to file its opening briefing. Alderoty expects the regulator to use this time to prepare the most comprehensive presentation of its arguments.

“Both parties will then agree on a briefing schedule, and the SEC will have up to 90 days to file its initial brief. Alderoty said he expects them to complete the full 90 days. This opening brief is a full narrative of all the legal arguments the SEC will make.” Ripple will submit a response and then submit its own briefing, according to Alderoty. “The entire briefing process will last until July 2025.”

Eleanor Terrett, Fox Business reporter Ripple won’t go public due to SEC

Garlinghouse had previously commented on the possibility of the company listing, drawing attention to the SEC’s position and Ripple’s financial stability. When asked about a potential IPO following the expected clarification of regulatory standards, Ripple CEO said that this is not the company’s main goal.

“Going public hasn’t been a high priority for us, and part of that is because the SEC isn’t our friend. I’m not very popular there. Unless there’s a dartboard in the SEC hallways, there’s no picture of me.”

Brad Garlinghouse, Ripple CEO

Garlinghouse also shared his hopes for the crypto market to come by 2025. He expressed optimism despite the current challenges in the industry, noting changes in the US government’s positions and increased interest from major players such as BlackRock. This shows increasing interest from institutional investors in blockchain technologies and capabilities.

He added that an improvement in the regulatory environment is important for entering the stock market, but Ripple has a strong financial foundation, which allows the company to continue its projects even without an IPO.

Back to top: How did the SEC and Ripple saga begin?

In December 2020, the SEC filed a lawsuit against Ripple Labs Inc. and its co-founders Christian Larson and Jed McCaleb. The lawsuit was based on accusations that they engaged in the unfair sale of an unspecified number of XRP tokens, which the SEC considered to be unregistered securities.

The SEC alleged that Ripple issued billions of XRP tokens and sold them for more than $1.3 billion without proper registration security. According to the SEC, the XRP token had to be registered as a security. The SEC also emphasized that XRP creates profit expectations for investors who meet the criteria to be classified as a security.

Ripple, on the other hand, argued that XRP should not be considered a security, but rather a digital currency similar to Bitcoin (BTC) and Ethereum (ETH), which the SEC does not classify as a security. Therefore, the company insisted that its actions comply with applicable laws.

In July 2023, the court held that the sale of XRP to private investors cannot be equated with securities transactions. However, the issue of major players purchasing tokens under the pre-agreement is still open.