Ripple to fight SEC’s appeal over XRP’s non-security status

Ripple Labs will fight the United States Securities and Exchange Commission’s appeal of a court decision ruling that retail sales of XRP do not violate securities laws.

In an Oct. 3 post, Ripple (XRP) CEO Brad Galinghouse vowed to fight the SEC for as long as necessary to preserve XRP’s non-security status and defend against the regulator’s objection. Calling the SEC’s objection “misguided and infuriating,” the Ripple executive wrote:

“Somehow they still haven’t gotten the message: They’ve lost everything that matters. Ripple, the crypto industry and the rule of law have already prevailed.”

On October 2, the SEC filed an appeal against the decision of the Southern District Court of New York, which concluded that XRP could not be classified as a security.

Recall that on July 13, Judge Analisa Torres ruled that the sale of XRP to retail investors was not an illegal securities offering and that the altcoin did not qualify as a security under the Howey test.

However, stating that Ripple’s corporate offerings violated the same laws due to the way the sales were carried out led the SEC to propose a $1.95 billion penalty to Ripple Labs.

Judge Torres reduced the fine to $125 million while stating that Ripple must formally register with the SEC if it wants to offer securities in the future.

Later, in a filing filed on September 4, both parties agreed to a stay order under which Ripple would deposit 111% of the $125 million fine into a secure account pending resolution of any objections. This arrangement effectively delayed payment and strongly implied the SEC’s intention to appeal the decision.

Ripple’s chief legal officer, Stuart Aldertoy, said the commission’s appeal decision was “not surprising” and criticized the agency and its current chairman, Gary Gensler, for engaging in what he described as a “litigation war” against the crypto industry.

“This further prolongs what is already a complete embarrassment for the agency,” Aldertoy wrote in an Oct. 3 post, adding that the blockchain payments firm would file a cross-appeal if it sees fit.

Hodl Law founder Fred Rispoli predicted the process could be lengthy, noting that a decision from the Second Circuit appeals court is unlikely to come before January 2026, more realistically around March or April 2026.

Gensler, meanwhile, recently came under fire from US lawmakers for the SEC’s aggressive enforcement strategy towards the crypto industry. During a congressional hearing, the SEC chairman was criticized for coining terms like “cryptoasset security” and for the SEC’s vague language regarding digital assets like Ethereum.

In related news, Ripple has continued to focus on its global expansion efforts despite legal complexities, and the firm recently received in-principle approval in Dubai.